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Full text of "The law of mortgage in India"

UNIVERSITY 

OF CALIFORNIA 

LOS ANGELES 



SCHOOL OF LAW 
LIBRARY 




TAGORE LAW LECTURES 1875-6. 



1875-6, 



THE 



LAW OF MORTGAGE IN INDIA. 



BY 



RASHBEHARY GHOSE, M.A., D.L., 

SOME TIME TAGORE LAW PROFESSOR, CALCUTTA. 



S IE C O IsT ID 



CALCUTTA: 

TH ACKER, SPINK AND Co. 

BOMBAY. THACKER & CO., LD. LONDON: W. THACKER & CO. 



1889. 



r 



CALCUTTA : 
PRINTED BY THACKER, SPINK ANp C3. 



PREFACE TO THE SECOND EDITION. 



THE following lectures were originally delivered by me as Tagore 
Professor of Law in the year 1876, and were published in the 
succeeding year. 

Nearly a dozen years have since passed away, and in the 
interval the Transfer of Property Act containing a special chapter 
on mortgages has been added to the Statute-book. The Courts of 
Justice too have not been idle and the law reports have furnished 
a mass of material, the value of which, if not always in proportion 
to its bulk, is still very considerable. 

In bringing out the present edition I have endeavoured to in- 
troduce the various alterations which have been made in the law 
since the date of the first publication of these lectures. The 
Transfer of Property Act with notes has been added as a supple- 
ment, while the new cases as a rule have been worked into the text. 

I have also taken this opportunity to introduce a larger number 
of decided cases than was compatible with the original design of 
the work as a course of lectures intended for the instruction of law 
students. This new feature will, I trust, render the book more 
acceptable to the profession without detracting from its usefulness 
to the class for whose benefit it was originally composed. 

Owing to the numerous changes which have taken place during 
the last twelve years, I have been obliged to re- write some por- 
tions of the work, while large additions have been made nearly to 
every part. The original design and mode of arrangement of the 
former edition have been however retained, although both are no 



VI PREFACE TO THE SECOND EDITION. 

doubt susceptible of a great deal of improvement. I can only 
plead in extenuation the daily interruptions of professional life 
which seldom leave the practising lawyer much leisure for the 
labours of an author. A few hours, it should be remembered, occa- 
sionally stolen from business is all that he can hope to bestow on 
his work. 

The alterations made by recent Statute-law, not being of a 
retrospective character and the Statute itself having at present a 
somewhat limited territorial operation, I have thought it proper to 
retain the exposition of the old law which was contained in the 
former edition, and which has not yet become wholly obsolete. 

In conclusion, I have to thank Mr. S. P. Sinha, advocate, for 
the preparation of the index to the present edition. My thanks 
are also due to Babu Ashutosh Mookerji, M.A., F.R.A.S., F.R.S.E., 
for passing the sheets through the press. 

CALCUTTA, ~i 
1st May 1889. J RASHBEHARY GHOSE. 



TABLE OF CONTENTS. 



LECTURE I. 

PAGE. 

Early history of institutions Doctrine of evolution in Law, illustrated by the 
Hindu Will Early notions of security Early law of distress Mortgage 
in early law Possessory lien Powers of sale and foreclosure Real 
security, how distinguished from real right Historical sketch of the Roman 
law of securities Similar notions traceable in early Hindu and Mahomedan 
law Fiducia Pignus Improvements in the Romau law of pledge, by the 
Praetorian jurisdiction, the actio serviana, and the quasi-Servian action 
External influences which modified the Roman law Growth of real security 
Power of sale History of the Fiducia The lex commissoria Fore- 
closure in Roman law Three-fold division of securities by Roman jurists, 
into conventional, legal, and judicial Rights of pledger and pledgee in 
Roman law Sale by mortgage Right of redemption Tacking 
Priority determined by time Potestative and non-potestative conditions 
Exceptions to the rule of priority Salvage liens Privileged liens Tacit 
hypothecation in Roman law Hypothecation how extinguished Extinc- 
tion by merger Marshalling in Roman law Effect of the mortgagor 
subsequently becoming the owner Right of subrogation, how acquired 
Extinction of pledge Pledge when redeemable Antichresis Liabilities 
of the pledgor and of the pledgee Pledge in systems founded on Roman 
law Important deviation in continental law English law of mortgage 
Equity of redemption Bill of foreclosure Decree for sale Remedies 
of mortgagee may be pursued concurrently Insufficient security English 
remedy foreclosure, but sale the more equitable remedy Who may redeem 
Equity of redemption cannot be restrained even by express contract Equity 
of redemption in the case of a second mortgage without notice Power of 
sale Liabilities of the mortgagee Influence of civil law Note giving 
tabular view of the classification of securities in Roman law 1 

LECTURE II. 

Hindu law of bailments Conflicting texts Early notions of pledge in Hindu 
law and gradual modification of these primitive notions Relation of Hindu 
law to Comparative Jurisprudence Tradition originally essential to validity 
of pledge Validity of pledge, unaccompanied by delivery of possession, 
acknowledged in fiib Chunder Ghose v. Hussick Cfiunder Neogy Importance 
of Tradition in early law Real and personal rights Possession not neces- 
sary in later Hindu law Priority of mortgage Possession important when 
any questions touching priority arose Conflicting texts cited side by side in 
Jagannath's Digest Mr. Justice Grant's judgment observed upon Jus 
gentium of the Roman law Pactum Prsctorium Hypothecation in Hindu 
law Early notions of security in Hindu law Pledgee had in early times 
only a right of detention Foreclosure, and power of sale, innovations 
Classification of pledges by Hindu lawyers Rule of Hindu law, interest not 
to exceed principal Development of Hindu law of mortgage Rule requir- 
ing tradition gradually fell into disuse Commentaries on Manu Hindu 
mode of interpi-etation Text of Vrihaspati Equity of redemption and 
sale by judicial process Gradual improvement of Hindu law Hindu law 
of mortgage in its maturity Beneficial pledge and pledge for custody Im- 
portant distinction between mortgage with and mortgage without possession 



viii TABLE OF CONTENTS. 

PAGE. 

Nature of Dristi-Bandhak Priority of mortgages in Hindu law Right 
of pledgee to sue when pledge is destroyed without his default Analogous 
rule in the Code Napoleon Equity of redemption of a usufructuary mort- 
gage Rights of mortgagor Validity of second mortgage Character of 
Hindu law of mortgage 26 

Mahommedan law of mortgage Gradual assimilation with Hindu law Differ- 
ence between Mahommedan law and Hindu and English law Analogy 
between Mahommedan law and Roman law Rahn, literally detention 
Pledge invalid unless followed by transfer of possession Conflicting opinions 
of Mahommedan lawyers on the point Possession being essential to the 
validity of a pledge, things incapable of seizin cannot be pledged Things 
which could be sold, but of which possession could not be given, could not be 
pledged The contrary opinion held by Shafei Pawnee lending the pledge 
to the pawnor, is freed from responsibility during the loan, but he may resume 
it at pleasure, and then his responsibility reverts A debtor may transfer 
his debt upon a property in the hands of another person Seizin not neces- 
sary under the Maliki law An equity of redemption cannot be the subject 
of a gift, though it can be sold Observation that this is probably a narrow 
construction of the Hanafi law Power of sale in Mahommedan law 
Rights of pledger Rights of pledgee Consequences of loss or destruction 
of pledge The expenses of custody of the pledge rest upon the pawnee, and 
those of preservation upon the pawnor ; taxes are defrayed by the pawnor 
Tithes must similarly be paid by the pawnor Pledge must be only for ex- 
isting debt Case of pledge for contingent debt Pledgee bound to produce 
the pledge on receiving a partial payment Destruction of the pledge by the 
pawnor and by a stranger Interest unlawful Influence of this rule in 
retarding development of law of pledge Qualified power of sale Must be 
given by contract itself Bye-bil-wufa, a comparatively modern innovation 

Conflicting opinions of Mahommedan lawyers as to its legality Opinion 
of Mahommedan law officer in Bussunt Ally's case Recognition of validity 
of Bye-bil-wufas in India Bye-bil-wufa really a security, not a sale 
Gradual recognition of hypothecation Probable influence of Hindu law 
No distinction between pledges of land and pledges of moveables Move- 
ables, originally the subject of pledge Gradual extension of pledge of land 

Hypothecation Gradual relaxation of the rule rendering tradition 
essential 43 

LECTURE III. 

Different kinds of mortgage Three principal kinds of conventional mortgages 

Simple mortgage Mortgage by conditional sale Usufructuary mort- 
gage Local mortgages Mortgage how created Writing not essential 
Oral agreements valid in Hindu and Mahommedan law Parol mortgages 
invalid in English law, but valid here, though the effect of the Indian Regis- 
tration Act is to give preference to registered instruments Two aspects of 
a mortgage Debt secured by mortgage on a bond how to be sold in execu- 
tion Mortgagee's interest, under English law, merely that of a security 
Specific performance of a mortgage not always allowed Conflict of laws 
Mortgage of immoveable property governed by the lex rei sitce This rule 
not recognized by the French Code Parol mortgage accompanied by posses- 
sion protected by the Registration Act, but constructive possession not suffi- 
cient Admissibility of parol evidence discussed Kassinath Chatterjee v 
Chutuly Churn Banerjee For qualifying the terms of a written instrument 
parol evidence inadmissible Parol evidence of " agreement," and of " acts " 
and " conduct" No real distinction between the two Provisions of the 
Evidence Act on the point Authorities for and against the admissibility of 
parol evidence of "acts" and " conduct " Parol defeasances ought to be 
held inadmissible Parol evidence when admissible in case of fraud or 
mistake - Justice Melvill's judgment True rule on the point formulated in 
the Specific Relief Act History of English law on the point Taltarum's 
Case Judges usurping the functions of the legislature and relaxing the 
Statute of 1 rauds Two kinds of consensual mortgages, express and impli- 
ed Mortgage by deposit of title-deeds Equitable mortgage in English 
law, as opposed to a legal mortgage Equitable mortgage in the mofussil 



TABLE OF CONTENTS. ix 

PAGE. 

Equitable mortgagee has only a decree for sale in the mofussil, but may fore- 
close in the original jurisdiction of the High Court Mortgage implied by 
delivery of the title-deeds, and, if further accompanied by an agreement, to 
create a charge : the transaction is an express conventional mortgage Var- 
den Seth Sam's Case Growth of equitable mortgage in England Memo- 
randums, true nature of Mortgage of the equity of redemption is an equi- 
table mortgage Registration Equitable mortgage in England, how creat- 
ed Mortgage of future crops What cannot be the subject of mortgage 

The expression " equitable mortgage" not properly applicable to a trans- 
action between natives of this country Defence of purchase for value with- 
out notice Equitable defence not available here In case of wilful neglect 
or fraud, such defence available Durga Prosad v. Shumbu Nath Memo- 
randum not the contract between the ^parties, but simply an evidence of the 
deposit of the title-deeds Kedernath Dutt v. Sham Lull Khetlry Bombay 
cases on the point Summary of decisions Registration of memorandum 
not necessary Equitable mortgage not an oral agreement within the mean- 
ing of the Registration Act Proper subjects of mortgage General hypo- 
thecation invalid Accidental destruction of object of pledge Capacity 
to mortgage Rights of a trustee with limited powers Persons under dis- 
ability incapable of creating a mortgage Case of a minor Rights of 
guardian Accessions to pledge Mortgagee's right to the accessions only 
a qualified right Leading case on the point, Rajah Kishendatt v. Raja 
Mumtaz All Mortgagor having defective title bound to make good mort- 
gage out of property subsequently acquired Right of the mortgagee, being 
in the nature of a right to claim specific performance, plea of purchase for 
value without notice is a good defence Frauds by the mortgagor and mort- 
gagee Doctrine of estoppel Right of the mortgagee does not extend to 
things not pledged to him Rights of mortgagor and mortgagee when pledge 
assumes a new form Byjnath Lull v, Ramdin Ghowdry Mortgagee not a 
party to a suit for partition of mortgaged joint family property Mortgage 
of joint estate in Roman law Mortgagee not estopped by a previous judg- 
ment Bonomally Nag's Case Question of estoppel discussed in Stturam 
v. Amir Begum Resjudicata Mortgagee when bound by the acts of the 
mortgagor Rights of the mortgagee Mortgagee entitled to detain title- 
deeds, and mortgagor to inspect them at all reasonable times Liability of 
the mortgagee of a lease-hold for rent Mortgage of a whole term in English 
law Power of sale in mofussil mortgages Validity of power of sale dis- 
cussed Bhowani Churn Mitter's Case Power of sale not allowed in the 
French Code 5o 

LECTURE IV. 

What constitutes simple mortgage Simple mortgage an equitable lien, and really 
comprises two transactions Questions of construction Miller v. Eanga 
Nath Personal liability of the mortgagor Noratum v. Sheo Perqush 
No particular form of words necessary to constitute simple mortgage Inten- 
tion of the parties Cases on the point Power of sale Nature of security 
possessed by simple mortgagee Simple mortgage how made available 
Agreement as to rate of interest Nature of decree for sale Mortgage 
decree Right of mortgagee to sue Period of grace allowed by some courts 
to mortgagor Rights of a purchaser under a decree not for sale Conflict- 
ing views of the Allahabad and Madras, and the Calcutta and Bombay High 
Courts What passes in a sale under a money-decree Doctrine of merger 
as explained in Venakata v. Ramiah Difference between money-decree and 
decree for specific enforcement of lien Rights of puisne incumbrancers 
Cases on the point Case of more than one incumbrancer Law of Proce- 
dure Knowledge of subsequent incumbrances not essential Who ought 
to be made parties to the suit ; case of mortgagor, owner of equity of redemp- 
tion, person with contingent interest, execution-purchaser and Mitakshara 
father Doctrine of virtual representation Cases on the point Rights 
of an absent transferree of equity of redemption Gopibundhoo v. Kalipodo 

Sale by puisne incumbrancer Rights of the first buyer of the equity of 
redemption Bwjnath v. Gobardhan Right of redemption of an absent 
interested party Account of mortgage debt Practice of mofussil courts 



X TABLE OF CONTENTS. 

PAGE. 

Mortgagee not entitled to sell equity of redemption under money-decree 
Right of transferree to redeem purchaser Cases on the point Mortgagee 
sells the property discharged of his own lien Nature of a simple mortgage 

Purchase by mortgagee Criticism of Bombay cases on the point Law 
of, execution Practice of Continental courts Right passing under a sale 

Relation of second to subsequent mortgagees Effect of clause against 
alienation in mortgage deed Breach of such a clause valid to what extent 

Roman law on the point Lis Pendens Provisions of the Procedure 
Code Right of prior mortgagee to sue for re-sale of property Mortgagee 
not bound to proceed against pledge Relative rights of the parties Prac- 
tice of the Court of Chancery Exceptional cases Case of portion of mort- 
gaged premises converted into money Joint mortgage by two or more mort- 
gagors English law on the point Right of one of several mortgagees to 
sue Suit for foreclosure Mortgagee free to proceed against any property 
to what extent Limitation of this right Section 271 of Act VIII of 1859 

Mortgagee may waive his rights Fakir Bux's case Decree upon a 
simple mortgage a decree for money Right of court to restrain mortgagee 
in case of collusion Section 287 of the Civil Procedure Code Section 295 
how construed Remedies of mortgagor Sale of property " subject to 
mortgage" Section 271 of Act VIII of 1859 Defence of bonA fide pur- 
chaser for value without notice not available Roman law on the subject 
Cases on the point Right of simple mortgagee a real right Statutes of 
limitation Period within which security must be enforced Court in which 
mortgagee must sue Conflicting decisions Question of pecuniary juris- 
diction 118 

LECTURE V. 

Mortgage by conditional sale Differences in form between conditional sale and 
English mortgages Differences between mortgages by conditional sale and 
sales with clause for re-purchase Question of intention Covenant by the 
moi-tgagor upon which he might be sued by the mortgagee True rule of con- 
struction No personal liability of the mortgagor Nature of the Dristi- 
bumlhuk and Gahen Lahen Rights of the mortgagee Personal liability 
of mortgagor not to be presumed in the absence of express covenant Con- 
struction of the Sudder Dewany Adalut Implied warranty of title by mort- 
gagor Remedy for breach of warranty Leading case on the point 
Measure of damages in England Remedy for defective title of mortgagor 
Remedy when security is insufficient Remedy of mortgagee when pledge is 
accidentally destroyed Principle upon which damages should be assessed 
Right of mortgagee to prevent waste when security is insufficient Failure to 
pay by appointed time Regulation XVII of 1806 Process of foreclosure 
in Bengal Stipulated period Shoroshee Bala Dabee's Case Forfeiture 
for breach of any condition Application to follow demand for payment 
The mortgage must be foreclosed as a whole Case of joint mortgagors 
Court to which application must be made Duty of court on receiving appli- 
cation Meaning of " Legal representatives " Notice Purchaser of part 
of property and attachment creditor, both legal representatives Notice to 
be served on whom Case of intestacy Case of more than one mortgagor 
Who are not entitled to notice Provisions of the Regulation mandatory and 
not merely directory Distinction between mandatory and directory enact- 
ments View of the Allahabad High Court What the notice ought to 
contain Proceedings under the Regulation merely ministerial Regular 
suit Forbes v. Amerunessa Title of the mortgagee Right to recover 
rents Nature of the restrictions imposed by the Regulation Denonath 
Gangooly's Case Process of foreclosure elsewhere than in Bengal, moulded 
on the practice of the English Court of Chancery Whether a mortgagee can 
pm*sue his remedies concurrently Right of mortgagee to possession 
immediately on default, how far qualified in Bengal by Regulation XVII 
of 1806 Limitation Act XIV of 1859 Cause of action what Pos- 
foreclosure mortgagor when permissive Mortgagee's cause of action 
before session of the Rights of mortgagor transferred to third party Trcs- 
l>a^scr holding adversely to both mortgagor and mortgagee Act IX of 1871 
and XV of 1877 ..194 



TABLE OF CONTENTS. xi 

PAGE. 

LECTURE VI. 

Equity of redemption Origin of expression Position of mortgagor before 
foreclosure Right to redeem Bengal Regulation XVII of 1806 Recog- 
nized by Courts of Justices in other Provinces Opinion of the Privy Coun- 
cil Puttaveramierv, Vencatta Row Naiker " Once a mortgage always a 
mortgage " Meaning of maxim Persons entitled to redeem Regulation 
XVII of 1806 Practice of English Courts of Chancery Mortgage security 
indivisible Effect of mortgagee's purchasing portion of mortgaged pro- 
perty Contribution Redemption under Bengal Regulations Deposit or 
tender What is a good deposit Rukea Begum v. Prannath Roy Chowdry 
Time within which deposit must be made Practice in Bombay and Madras 

Limitation Acknowledgment Effect of acknowledgment by one of 
several mortgagees Difference between English Statute and Indian Act ... 237 

LECTURE VII. 

Usufructuary mortgage What constitutes usufructuary mortgages Personal 
liability of mortgagor Zuripeshgec leases Difference between Zuripeshgee 
and ordinary leases Hanuman Persad Pandey's case Origin of Zuripesh- 
gee leases Rights and liabilities of usufructuary mortgagee before and after 
repeal of Usury Laws Liability to account Right of redemption of mort- 
gagor Simple usufructuary mortgagee not entitled to decree for sale 
Limitation 271 

LECTURE VIII. 

Liability of mortgagee in possession to account Regulation XV of 1793 
Meaning of "gross receipts " Mortgagee not competent to create middle- 
men Allowance for expenses of collection Practice of our Courts 
Nature of accounts which mortgagee is bound to produce Verification of 
accounts Right of mortgagee to interest not exceeding 12 per cent Shah 
MakhunLoll v. SreekiissenSliuj Liability of mortgagee since Act XXVIII of 
1S55 Zuripeshgee leases Allowance for necessary repairs Improvements 
how far allowed Payment of Government revenue Mode of taking 
accounts Liability of mortgagee after notice of subsequent incumbrance 
Mortgagor not liable to account Mortgagee not a trustee for mortgagor 
Wassilat distinct from usufruct Mortgagee chargeable with occupation 
rent Suit for redemption Practice of the Courts in Bengal Procedure 
in such cases elsewhere 287 

LECTURE IX. 

Liens Legal and Judicial Distinction between Statutory liens Regula- 
tion VIII of 1819 and Act VIII of 1869 (B.C.) Act XI of 1859 Salvor's 
lien Lien of co-sharer for revenue paid by him Unpaid vendor's lien 
Mwkft'tli. \. Summons What constitutes waiver of lien Objections to legal 
liens Registration Purchasers without notice Practice of English Court 
of Chancery Purchaser's lien Lien of partners and agents Tenants in 
common No lien for dower in Mahomedan law None in favour of credi- 
tors on assets of deceased debtor in Hindu or Mahomedan law Judicial lieu 

Attachment before and after judgment Operation of Section 240 of Act 
VIII of 18.39 Alienation by debtor not absolutely void Aniiiul Molnm 
J)asfi v. Badha Mohan Shah Striking off attachment Effect of Piuhlo- 
tuoneij v. Roy Mothuranath Chomlhry ... ' 314 

LECTURE X. 

Subrogation Application of rule Rights of puisne incumbrancers Rights 
of surety Entitled to benefit of securities held by creditor How far dis- 
charged by relinquishment of security Security not relinquished by pay- 
ment Rule of English law Followed in India Co-debtors How far 
entitled to benefit of securities Purchasers of mortgagor's rights redeeming 
a mortgage, how far entitled to benefit of subrogation Other cases illustra- 



Xll TABLE OF CONTENTS. 

PAGE. 

tive of the rule Contribution Principle on which founded Doctrine 
followed in India Marshalling" of securities Rule of English law 
Adopted by our Courts Distinction between purchasers and incumbrancers 

Notice immaterial in the case of a mortgage 339 

LECTURE XI. 

Pledge of moveables Paucity of authority Contract Act Definition of 
pledge Validity of hypothecation of moveables Danger of fraud Dis- 
tinction between a pledge and a mortgage of chattels Power of sale 
Pawnee's lien extends to interest and necessary expenses Extraordinary 
expenses Right of pawnee to tack subsequent advances Rule of English 
law Right of pawnee to make use of pledge Degree of diligence imposed 
on pawnee Differences between Indian law and English and Roman law on 
the point Pawnor's right to accessions Right of redemption Passes to 
the lega'l representative Possessory heirs General and special Unpaid 
seller's lien May be varied Right of resale Differences between Indian 
and English law Lien of artificers Banker's and attorney's lien for general 
balance of account 355 

LECTURE XII. 

Extinction of securities Consolidation Merger of debt Right of prior 
mortgagee how far extinguished Rule of Roman law Doctrine of English 
Court of Chancery Conflicting decisions in India Extinction of security 
by dischai'ge of obligation Novation Substitutionary and cumulative 
Extinction of security by destruction or sale of pledge or prescription and 
renunciation Priority Generally determined by order of time How 
affected by registration Notice immaterial Priority how far affected by 
possession Rule of Hindu law Privileged liens Salvor's lien Tacking 

Extent to which recognised in Roman law Doctrine of English law 
Origin of doctrine Not followed in India Consolidation of securities 
Rule of English law Partial recognition by our Courts Mortgage to secure 
future advances How priority is forfeited Fraud, actual or constructive, 
of mortgagee Laches Effect of allowing title-deeds to remain in custody 
of mortgagor Allowing mortgagor to receive rents after notice of incum- 
brance Deeds of further charge Practice in India Waiver of security 
not presumed Lis pendens Application of doctrine in relation to priority 

of securities 369 



TRANSFER OF PROPERTY ACT, 1882- 



CHAPTER I. 

PRELIMINARY. 

Preamble Short title Commencement Extent Repeal of Acts Saving 
of certain enactments, incidents, rights, liabilities, &c. Interpretation- 
clause " immoveable property": "instrument": "registered": - 
" attached to the earth" "Notice." Cf. sec. 36 A., 1882 Enactments 
relating to contracts to be taken as part of Act IX of 1872 ... ... ... 403 

CHAPTER II. 
OF TRANSFERS OF PROPERTY BY ACT OF PARTIES. 

" Transfer of Property " defined What may be transferred Persons compe- 
tent to transfer Operation of transfer Oral transfer Condition res- 
training alienation Restriction repugnant to interest created Condition 
making interest determinable on insolvency or attempted alienation Trans- 
fer for benefit of unborn person Rule against perpetuity Transfer to 



TABLE OF CONTENTS. XI ii 

PAGE. 

class some of whom come under sections 13 and 14 Transfer to take effect 
on failure of prior transfer Transfer in perpetuity for benefit of public 
Direction for accumulation Vested interest When unborn person acquires 
vested interest on transfer for his benefit Contingent interest Trans- 
fer to members of a class who attain a particular age Transfer contin- 
gent on happening of specified uncertain event Transfer to such of certain 
persons as survive at some period not specified Conditional transfer 
Fulfilment of condition precedent Conditional transfer to one person coupled 
with transfer to another on failure of prior disposition Ulterior transfer 
conditional on happening or not happening of specified event Fulfilment of 
condition subsequent Prior disposition not affected by invalidity of ulterior 
disposition Condition that transfer shall cease to have effect in case speci- 
fied uncertain event happens or does not happens Such condition must not 
be invalid Transfer conditional on performance of act, no time being spe- 
cified for performance Transfer conditional on performance of act, time 
being specified Election when necessary Apportionment of periodical 
payments on determination of interest of person entitled Apportionment of 
benefit of obligation on severance Transfer by person authorized only under 
certain circumstances to transfer Transfer where third person is entitled 
to maintenance Burden of obligation imposing restriction on use of land, 
or of obligation annexed to ownership, but not amounting to interest or ease- 
ment Transfer by ostensible owner Transfer by person having authority 
to revoke former transfer Transfer by unauthorized person who subse- 
quently acquires interest in property transferred Transfer by one co-owner 
Joint transfer for consideration Transfer for consideration by persons 
having distinct interests Transfer by co-owners of share in common pro- 
perty Priority of rights created by transfer Transferee's right under 
policy Rent bond fide paid to holder under defective title Improvements 
made by bond fide holders under defective titles Transfer of property pend- 
ing suit relating thereto Fraudulent transfer ... ... ... ...411 

CHAPTER III. 

OF SALES OF IMMOVEABLE PROPERTY. 

" Sale" defined Sale how made Contract for sale Rights and liabilities of 
buyer and seller Sale of one of two properties subject to a common charge 

Provision by Court for incumbrances, and sale freed therefrom 436 

CHAPTER IV. 
OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES. 

" Mortgage," " mortgagor " and " mortgagee " defined Simple mortgage Mort- 
gage by conditional sale Usufructuary mortgage English mortgage 

Mortgage when to be by assurance Right of mortgagor to redeem 

Redemption of portion of mortgaged property Right to redeem one 
of two properties separately mortgaged Right of usufructuary mortgagor 
to recover possession Accession to mortgaged property Accession 
acquired in virtue of transferred ownership Renewal of Mortgaged lease 

Implied contracts by mortgagor Waste by mortgagor in possession 

Right to foreclosure or sale Right to sue for mortgage-money 
Power of sale when valid Accession to mortgaged property Renewal 
of mortgaged lease Rights of mortgagee in possession Charge on pro- 
ceeds of revenue-sale Right of subsequent mortgagee to pay off prior 
mortgagee Rights of mesne mortgagee against prior and subsequent mort- 
gagees Liabilities of mortgagee in possession Loss occasioned by his 
default Receipts in lieu of interest Postponement of prior mortgagee 
Mortgage to secure uncertain amount when maximum is expressed Tacking 
abolished Marshalling securities Contribution to mortgage debt Power 
to deposit in Court money due on mortgage Right to money deposited by 
mortgagor Cessation of interest Parties to suits for foreclosure, sale and 
redemption Procedure in case of payment of amount due Order absolute 
for foreclosure Power to enlarge time Decree for sale Power to decree 



xiv TABLE OF CONTENTS. 

PAOE. 

sale in foreclosure suit Procedure when defendant pays amount due Order 
absolute for sale Recovery of balance due on mortgage Who may sue for 
redemption Decree in redemption-suit In case of redemption, possession 

In default, foreclosure or sale Power to enlarge time Costs of mort- 
gagee subsequent to decree Charge of one of several co-mortgagors who 
redeems Sale of property subject to prior mortgage Application of pro- 
ceeds Mortgage not described in sec. 58 Attachment of mortgaged pro- 
perty Charges Extinguishment of charges Service or tender on or to 
agent Notice, &c., to or by person incompetent to contract Power to 
make rules ... ... ... ... ... ... ... ... ... ... ... 444 

CHAPTER V. 

OF LEASES OF IMMOVEABLE PROPERTY. 

Lease defined Lessor, lessee, premium and rent defined Duration of certain 
leases in absence of written contract or local usage Leases how made 
Rights and liabilities of lessor and lessee Rights of lessor's transferrec 
Exclusion of day on which term commences Duration of lease for a year 
Option to determine lease Determination of lease Waiver of forfeiture 

Waiver of notice to quit Relief against forfeiture for non-payment of 
rent Effect of surrender and forfeiture on under-leases Effect of holding 
over Exemption of leases for agricultural purposes 502 

CHAPTER VI. 

OF EXCHANGES. 

"Exchange " defined Right of party deprived of thing received in exchange 
Rights and liabilities of parties Exchange of money 509 

CHAPTER VII. 

OF GIFTS. 

" Gift" defined Acceptance when to be made Transfer how effected Gift 
of existing and future property Gift to several, of whom one does not accept 
When gift may be suspended or revoked Onerous gifts Onerous gift to 
disqualified person Univei-sal donee Saving of donations mortis cuityti and 
Muhammadan law 509 

CHAPTER VIII. 
OF TRANSFERS OF ACTIONABLE CLAIMS. 

Actionable claim Transfer of debts Notice to be in writing signed Debtor 
to give effect to transfer Warranty of solvency of debtor Discharge of 
person against whom claim is sold Incapacity of officers connected with 
Courts of Justice Liability of transferree of debt Mortgage-debt 
Saving of negotiable instruments 511 



TABLE OF CASES CITED. 



** All titles prefixed to the names of the parties, such as Babu, Maharaja, 
Syud, &c., have been, as a rule, discarded. 

A. 

Abadi n. Asa 
Abbas v. Sahib ... 

Abilar lluhman v. Kisto 
Abdool o. Jaunali 

v. Sadik 

Abdoolah v. Abdoolah ... 
Abdul v. Knslii ... 

v. Zibnn ... 
Abernmtxn Works v. Wickons 
Abool v. Raphn 
Achumbit v. Keso 
Achut Ram v. lion 
Achuta v. Kali 
Adams v. Angell 
v. Claxton 

' v. Scott ... 
Adjoodhya . Girdhnree 
Adjudhya Ham v. Ashootosh 
Adnam . Earl of Sandwich 
Agra Bank v. Barry 389, 390, 

391, 393, 398, 399, 406, 
Ahmed v. Kunhamed ... 

- v. How Nakhar 
. Jowhir 
Ahmedbhoy v. Vulleebhoy 
Ahollya v. Shama 

Ajid Hossein . Hafiz 
Ajoodbya v. Moracha 
Ajndharam v. Shama 
Akhernm v. Nnndkishore 
Akoba v. Shnkha 
Aleock, In re ... 
Alderson v. White 

Ali v. Lulta 

v. Nillakanden 

Aliba . Nanu 1 



Page. 


Page. 




Alihnsan r. Dhiija, 134, 158, 3".'!, 


... 499 


416,476 


... 290 


Alikhan r. Mahomed (Bom P. ,]. 


... 262 


1881,319) 252 


... 139 


(I L. R., X Bom., 658) 258 


... 249 


Ali Muhammad v. Turab ... 171 


140, 144 


Ali Shah v. Husain 435 


278, 284 


Allah Buksh v. Sada Snr ... 261 


... 530 


Allen v. Knight ... ... 90 


... 440 


Alln v. Roshan ... ... 244, 386 


... 397 


Alu Prosad v. Snklian ... ... 197 


... 303 


Amanat ??. Bhnjan 193, 251, 528 


... 317 


Amanee v. Meher ... ... 33 j 


... 519 


Ambala v. Naduvakat ... ... 523 


370, 374 


Ambu v. Hainan ... ... 520 


... 361 


Auneer-ood-deen o. Ramchand 292 


... 461 


Ameeroolah v. Hamdass ... 299 


... 289 


Amidi v. Debi ... ... ... 192 


... 302 


Amu v. Rama 231 


... 524 


Anachnla v. Zemindar of S ... 112 


90, 


Anagi v, Dhundliud ... ... 247 


406, 408 


Analcaran v. Saidamadatli ... 59 


... 518 


Anand v. Panchilal ... ... 435 


... 345 


Anandrav v. Ravji ... ... 299 


254. 255 


Anderson v. Pignet ... ... 370 


... Ill 


Angell v. Bryan ... 322, 382 


... 527 


Anna v. Narran ... ... 447 


... 344 


Annapa v. Ganpati ... 128, 529 


... 159 


Annopurna v. Gunganarian ... 333 


... 145 


Anonymous case ([. L. R., VII 


... 119 


Ma-3., 209) 525 


1 A(\ 


/T T 1> VTTT 


... I i" 

... 451 


Mad., 104) 525 


... 197 


a I, T? vri ~\ia,i 




... 270 


203) ... 525 


... 520 


(\ 1 P Y P il - 




405, 445 : 274) 525 



XVI TABLE OF 

Page. 

Anonymous case (I. L. R., VII 
Mad., 421) 525 
(I. L. R., V Mad., 
18) 525 


CASES CITED. 

Page. 
Balaji v. Dnji 276 
v. Kbusbalji ... 396, 435 
v. Nana 299 
Balambhat v. Sitaram 250 
Balfleo v. Gokal 191, 236, 480 
Balkissen v. Run Bahadur 481, 482 
Ballcrishna v. Nagvekar 526, 528 
Baloji v. Tainan 308 
Bamasoonduree . Bamasoon- 
duree ... .., ... 293 
Banapa v. Sundardas ... 65, 67 
Bandarn v. Atcbayamma ... 126 
Bani . Rith Bhanjau 158 
Bank of Bengal v. Nundolal ... 172 


(-[ T, P V Pole 


92,) '... 525 


i (I. L. R., V Mad., 
287) 527 


Anrudb . Sheo Persbad ... 267 
Auund c. Siibul 277 
Anundmoyee v. Dbonendro 219 
225, 230, 435, 477 
Apaji v. Kavji ... ... ... 374 
Appasami v. Scott ... ... 59 
Arrann v. Norruton ... ... 196 
Arijaputri v. Alamelu ... 477, 493 
Aijan - Asgar ... ... ... 481 
Armstrong v. Garnett ... .. 370 
Arulu v. Waku 482 
Asansab v. Vamana 250,258,347 
Asapal p. Nunkoo ... ... 245 
Ashbtirner v. Macguire ... 359 
Ashton v. Corrigan ... . . 59 
Asliutosh v. Mohesh 93 
Ash worth v. Lord ... 468, 479 
Assnmatbein . Lucbmiput ... 140 
Atbil, In re 347, 349 
Atkinson v. Jones ... ... 126 
Att.-Genl. v. Biphospbated G. Co. 410 
Aubindro v. Cbannoo ... 142, 305 
AveralU. Wade 351,352,474 
Azim-un-nessa v. Dale ... ... 435 
Azimut AH v. Zoobur .. ... 258 

B. 

Hnbnji v. Vithu 268 
Baboolall v. Jamal 308 
Bacbu v. Madad 177 
Badri v. Daulut 200, 378, 446 
. Murali 288 
Bajibelin v. Matbura 276 
Bahadur v. Nawabjan ... 251, 527 
Bahraicbi v. Surju 162 
Baijan v Brijbbookun ... ... 139 
Baijnath v. Gobordbon ... 143,248 


of Hidnstan v. Shoroshibala 220 
Bankhead's Trust, In re ... 76 
Bansi v. Buali . ... 480, 481 
Bansidhar v. Santlal 414 
Bunwari . Muhammad 388, 481, 482 
Bnpirazu v. Kainarazu ... ... 242 
Bapu v. Ramji ... ... 227 
Bapnji v. Sattyabbama 32, 353, 529 
v. Sena 198, 199, 200, 241 
Bapusabin v. Ramjibun ... 299 
Barker v. Smart ' ... 131,226 
Barnes v. Racster ... 472, 486 
Barnett . Weston 391 
Barnbart . Greenshields 65, 530 
Barrett v. Hartley 297 
Bartholomew v. May ... ... 474 
Basant v. Kanauji ,, ... 305 
v. Tapeswari ... ... 271 
Basavayya v. Subba ... 481, 482 
Basawa v. Kalkapa ... .. 529 
Basdeo v. Matadin 220 
Batchelor v. Middletou ... 523 
Bavaji v. Ram ... ,,. ... 530 
Baynard v. Woolley ... ... 75 
Bazayet v. Dooli ... 428,435 
Beattie r. Jetba 114 
Beavan . Earl of Oxford .. 353 
Bebee Jaun . Mirza ... ... 191 
Beclioo v. Sbeosahoy .. ... 304 
Beejoy v. Bbeekoo ... ... 144 
Beetben, In re. ... ... ... 449 
Beevor v. Luck 340 
Bebari v. Ganpat ... ... 492 
v Pbckoo ^75 


v. Shah Ali 481 


Baikesar . Dullabb 345 
Baikesserbai v. Narranji ... 230 
Baker v. Gray ... ... ... 386 
Bakshi v. Darku 94 
Baksu r. Govinda ... 65, 67, 68 


Beharilal v. Benilal ... ... 213 
Belding v. Read ... 413. 414 
Bell v. Sutherland, B. S. ... 104 
Bellamy v. Sabine ... 396, 433 



TABLE OF CASES CITED. 



XV11 



Page. 
Bengal B. Corp. v. Mackertich ... 75 

I. Co. v. Koylns ... 524 

Bennett v. Cooper 414 

Bentbara v. Haincourt ... 308, 394 

Bentinck v. Willink 114 

Bhagirath 0. Naubat ... 344, 347 
Bhagun v. Holloway ... ... 177 

Bhagvan v. Hatibbai ... .... 177 

Bhagwan . Nathu .., ... 435 

v. Sbeo Sahay ... ]77 

Bhairob v. Sowdamini ... ... 138 

Bbajan v. Musbtak 200 

Bbanumatee v. Preinchand 117, 155 

219,435 

Bbapul v. Jagrain 90 

Bhaudin v. Ismail 477 

Bbawani v. Gulab ... ... 59 

v. Dalmardan ... 113 

Hlieeman v. Eeranab ... ... 524 

Bbeekbun v. Bhecbun 221 

Blieri v. Maddiputu ... . 90 

Bliikaji v. Yoshvantraw ... 353 

Bhobani v. Shibnath 529 

Bbobosoondaree . Issur ... 32 

v. Rakhiil 405 

Bhoirub v. Nudearcband ... 345 
Bbola v. Baldeo ... ... 530 

v. Fatetb 482 

Bbolauatb v. Aunnoda 117 

Bhoop 0. Nursing 477 

Bbora v. Abila 214 

Bbowani v. Joykissen ... ... 115 

Bhowanicluu-n v. Gooroopersbad 219 
Bliugobutty v. Shama 146, 435 

Bhugwan v. Govind ... 202 

v. Mabomed ... 250 

Bbup v. Mubammadi ... 200 

v. Zain-ul-abdin ... ... 378 

Bliurrut v. Gopal ... ... 388 

Bhyrub 0. Gogaram .,. 313 

Bickerton v. Walker 514, 515 

Bimaraz v. Papaya . . ... 397 

Binda 0. Madbo 177 

Bir v. Maboraed 159 

Bircbunder v. Afsaroodeen 127 

Bisbandial v. Manni Ram, 213, 214, 476 
Bisbendayal v. Uditnarain 125, 127 
Bishesbar v. Bhagi Rattu ... 523 

v. Liiik ... 214, 252 

Bishonauth v. Kisto ... 351, 354 
Bishop of Winchester v. Paine 219 
Bissen Doss v. Sheoprosad ... 373 
Bissonath v. Radba 435 



Page. 
Bit tli ul v. Toolseeram ... ... 258 

Blacklock o. Barnes 289 

Blnquiere 0. Ram Dhone ... 477 

Bolakeelal v. Bangsee ... 124 

Boloram v. Damoodur ... 106 

Hun ham v. Newcomb ... ... 244 

Bonomalli 0. Koylash ... 109,110 

Botbamby v. Sberson 359 

Bowman v. Blytb ... ... 221 

Boykuntb Nntb v. Ameeroonissa 1 1 1 
Bradeley v. Consolidated Bank 5 12 
Bradford B. Co. v. Briggs 383, 471 
Bradshaw, Exp. ... ... 471 

Brahannayaki v. Krishna ... 435 

Brabmoraoye v. Diunobundbu, 233, 

234 
Briggs v. Jones ... .. 391 

Brijnatb v Juggernath 330 

Brijo v. Radba ... .. 218 

Brijoolall v. Mutty 313 

Bromomoyee v. Boykunt ... 170 

Brojo v. Bbugobutty, 292 

0, Khelat . ' ... 225, 477 

v. Mabomed 143 

- v. Nobakishen 216 

Broughton . Binks 163 

Browne v. Bisbop of Cork ... 525 
Brown v. Cole ... 268, 282 

0. London, &c., Co. ... 113 

v. Story 463 

Bruce, Exp. .. ... 85 

Brumley v. Fanning' ... 455 
Budnn v. Ram .. 127, 170 

Buldeen v. Golab .. 211,229 

Buldeo v. Mulkoer 192 

Bull v. Hutcbins .. ... 435 

Bungsee v. Soodist .. ... 162 

Bunsbeedbur v. Heera .. ... 78 

Bunwaree v. Mahomed .. ... 271 

Burke, In re. .. ... 450 

Burnomoyee v. Benode ... 266 

Burrows v. Molloy ... ... 282 

Busunt Ali v. Ram Koniar 52, 199 

Buxton, Exp. 113 

Buzlool 0. Gunput 328 

Byjonath r. Doolbun ... 172,350 
Byjnatb v. Ramadin 105 

C. 

Caledonian Ry. Co v. Carmicbael 480 
Campbell 0. Holyland ... 476, 489 

0. Roth well 342 

Carter v. Wake 358 

b 



XV111 



TABLE OF CASES CITED. 



Casburne v. Inglid 
Cave o. Cave 
Chambers r. Howell 
Cbandika v. Pukkur 
Chandra v. Iswar ... 

Clmrles v. Jones 
Charta v. Poornu 
Cbatliu v. Aku ... 

Cbetoosee v. Bany 
Chetti v. Sunday-am 191, 

Chliab v. Kaiuta 
Cbidatnbara v. Munikya 
Chinuayya v. Cbidatu 
Cbinto v. Lakshman 
Cliinumau v Subram ... 
Chissum v. Dewes 
Chobi v. Pitoin 
Chockkalinora v. Subbanaya 
Cbokey . Kalian 
Cbolmondeley v. Clinton 
Chonneeu. Pubulwan 
Choti v. Kalka 
Cliotoolal v. Miller 
Cluulu v. Mabant 
Chubar v. Mir 
Cbujjoo v. Nasir 
Clmnder v. Godroo 
Cliunder KisLore, Exp. ... 
Kuifiar v. Gdpikisto 
Cbumlra N;itl v. Nilakanta 
Clmni v. Tlmkur 156, 1.57, 
Cbunilal v. Banaspat 
Cbuiuiy v. Pallowun 
Cburaman v. Balli 
Chutoorbbooj v. Doorga 
Chutterdharee v. Uamdoulun 
Clack v. Holland 
Clarke, In re 

v. Palmer ...389, 

Cleary . M* Andrew 
Clegg v. Edmondsoh 
Clements v. Matthews ... 
Cockburn v. Kd wards ... 

v. Thompson ... 

Cogun v. Pogose 
Coggs v. Bernard 
Coleman v. Llewellm ... 
Collydus v. Sbibchunder 
Collyer v. Isaacs ... 

Colyer v. Finch 391, 

Coming, Exp. 
Constable v. Howick 
Cook . Field 



Page. 


Page. 


... 309 


Cook v. Fowler 


... 


126 


379, 410 


Coomb, Exp. 





75 


... 410 


Coombe v. Carter ... 


* 


413 


214, 250 


Copis v. Middleton 


110, 


343 


268, 284 


Corbett v. Plowden 




289 


... 479 


Cotterell v. Purchase 





65 


... 267 


Court of Wards v. If am pat 


... 


139 


... 5-24 


Cracknall v. Jans on 


104, 


386 


... 354 


Craytborne v. Swinburne 




340 


446, 447 


Ore we v. Kddleston 





113 


... 480 


Crofts . Fenge 




59 


... 200 


Cummins v. Fletcher 




386 


305, 514 


Cutts v. Brown 


'"65,67 


... 286 








94 


D. 






... 461 


Dabee v. Mann 




217 


... 290 


Daia v. Sarfraz ... 


... 


523 


... 167 


Daimoddee v. Kaim 


. . . 


65 


... 290 


Dalip '. Durga ... 




529 


... 525 


Damodar v. Mobadev ... 


142, 


151 


... 90 


n . XT...^ 


136, 


145 




... 290 


v. Vamanrav ... 


302, 


525 


... 483 


Damodhar v. Kahan Dass 


... 


477 


... 286 


Daniell v. Sinclair 


... 


479 


... 480 


Dtmlat v. Mebr 


... 


476 


... 523 


Davani v. liatna 


191, 


236 


... 90 


Davirawoot v. Heeraraon 


... 


265 


... 123 


Davis v. Dendy ... 


... 


22 


... 434 


Dayacband v. Heuicband 


... 


178 


162, 435 


Dayal v. Jivraj ... 85, 


410, 


449 


158, 416 


Deans v. Richardson ... 


... 


357 


... 161 


De Caux v. Skipper 


... 


489 


... 124 De Nicbolls v. Saunders 


... 


463 


408, 409 D'Epineuil, In re 


413, 


414 


... 304 : Dearman v. Wycbee 


... 


234 


310 


Debendro v. Hnplall 


... 


5Q 


... 382 


Debi v. Parbbu 


... 


127 


91, 447 


Deen Doyal v. Het Naraiu 


447, 


480 


391, 469 


v Jagdeep . . 


... 


139 


... ' 82 


Deeze, Exp 


. .. 


361 


... 453 


Def holts 11. Peters 


... 


178 


413, 415 


Degg v Mid. lly. Co. ... 


. . . 


408 


... 459 Degumbnree v. Esban ... 


343, 


435 


139 ! Demainbray v. Metcalfe... 


... 


361 


89 Denonnth v. Nursing 220, 


224, 


228, 


... 362 






234 


... 490 


Deo Dat v. Ram Autar 


... 


475 


34 Deojit v. Pitatnbar 


... 


90 


... 415 ! Deolie v. Nirbnn 


... 


100 


393, 408 I Deonnrain v. Naek 


... 


467 


... 449 Deonundon v. Desputty 


... 


317 


489, 490 Dep. Comm. v. Raiupal 


.< 


271 


... 414 


Devendro v. Torak ... 


* 


334 



TABLE OF CASES CITED. 



XIX 



Devi Dyal v. Prob Dyal 
Dlmrraa v. Govind ... 

Dlumdo . Balkrislma ... 
Dhunnoo w Boorhan 
Dhunpnt v. Gnlnni 
Dickenson v. Harrison . 
Dicker v. Aiigusteen 
Diokiit o Dickin 
Diorraj v. Dehi 
Dilownr v. Boliikee 
Dinendra v. Chniidra 
Dinkar v. Sheogolam 
Dinornoye v. Tarnchand 
Dipnarain v. Dipan 
Dirgopal v. Bolakee 
Ditton, Exp. 
Dixon v. Muckleston 

v. Parker 

Doble t?. Manley ... 

Doddington v. Hallet ... 

Doe v. Patt 

d. Fisher . Giles 

d. Gibbons v. Pott 
Higginbotham 



.. 524 
... 523 
227, 249 
... 247 
... 126 
... 126 
... 460 
... 443 
.. 216 
344, 351 
... 405 
267. 313 
... 91 
... 480 
142, 162 



84 

... 65 
... 483 
... 337 
... 96 
462, 461 
.. 463 
w. 

... 463 
.. Goldwin 463 

d. Parsley v. Day 462, 463 

d. Roby v. Maisey 462, 463 
d. Roylance v. Light- 




foot 

Dolphin v. Aylward 
Doma v. Nathan 
Donald v. Suckling 
Doolal v. Goluck 
Doolay v. Goolain 
Doole v. Orada 
Dooma v. Joonarain 
Doorga v. Issnr ... 
Dorappa v. Kundulcnri 



462 
... 354 
... 221 

... 358 
... 154 
... 477 

178, 305, 478 
... 109 
... 287 

268, 274, 278 



Doss v. Secretary <>f State ... 192 
Doucettc. Wise (III Suth. W.R., 

)57) 461 

(II Ind. Jar, 280) ... 241 

Douglas v. Collector of Benares 183 

v. Culverwell ... 65 

Doul v. Runjit 283 

Doulat v. Bhukundns 489 

D<<wbiggin v. Bourne ... ... 343 

Downes v. Grazebrook ... ... 309 

Drake v. Mitchell ... ... 129 

Dryden v. Frost ... 325, 440 

Dukclinre r. Hedayat 244 

Duli Chand v. Moiiohnr 373 



Page. 

... 178 
163, 

395, 477 
... 285 
... 340 
... 474 
... 248 
... 79 
408, 409 
... 234 
... 203 
83 
374 



Dullab v. Krishna 
Dullabhdas v. Lakshmaudas 

Dull! . Bahadur 
Duncan . N. W. Bank.... 

Dunlop, In re ... ... 

Durga v. Lucbmnn 

. V. Shumblm 

Durganarain v. Baney ... 
Duvigier . Lee 
Dwarka v. Rutton 

v. Saratkumari 

Dyal v. Sukharam 

E. 

Earl of Buckinghamshire v. Ho- 

bart 375 

Early v. Early 349 

Bdathil v. Kopashon ... ... 517 

Elton v. Curteis 483 

Enait v. Khar 304 

v. Moddonmuni 317 

Euayet v. Romzan 331 

Ensworth v. Griffith 197 

Esaf Ali v. Azumtoonessa ... 219 
European C. Ry. Co., Exp. ... 129 
Evans v. Bicknell ... ... 393 

v. Wyatt 349 

Exliall coal Co., In re. ... 381, 500 
Eyre v. Burmester .,. ... 396 

v. Hughes 479 

F. 
Fakir v. Sadat ... 251,286 

v. Umabai 299 

Falcke v. Scottish I. Co., 319, 33P, 337 

382 
Fan-ant P. Lovel ... ... 455 

Fairer v. Lacy & Co. ... 202, 483 

Farron v. Rees ... ... 90 

Fewings, Exp. ... 131,202,464 

Fitzgerald v. Champneys ... 482 



Forbes v. Ameerunissa 



v Jackson 



Forster v. Hale 

France v. Clark ., 

Francklyn v. Feme .. 
Frazer v. Joiies 

Frewin v. Paul 
Friend v. Deimet 
Fruval v. Sanagapalli 
Fukiri'. Chuttordharee, 170,173,174 

181, 182 



213, 221, 222 
224, 293, 296 
340, 342 
... 71 
... 359 
... 65 
... 377 
... 66 
... 221 
435 



XX 



TABLE OF CASES CITED. 



Fury . Smith ... 

Fuzeelun v. Omdab 

G. 

G. N. Ry. v. Sanderson ... 
Gajadhar v. Daibee .., 
Galbraitb v. Cooper 
Ganes v. Sadanund 
Ganesh v. Raghu 

v. Snjhari 

Ganga v. Bansi .., 

v. Bayajee 

v. Kisben 

77. Kushagiri 

v. Kalipodo 

Ganpat t7. Adarji, 61, 84, 



. v. Sarupi 
Ganpati v. Damodar 
Gansavant v. Narayan 



249, 



Garnett v. Armstrong ... 
Gartside v. Silkstone &c. Co. 
Gayaprasad v. Salikprasad 
Gazee-ood-deen v. Bhookun 
General F. Co. v. Liberator P 

Society 

Geora v. Kukoom 
Gholam v. Emamun ... 

v. Fufjo 

Ghonaram v. Ram ... 

Gibson v. Seagrim 
Girdhari v. Collis ... 

Girjoji v. Keshao 
Girwar v. Thakur 
Gobnrdhan v. Gokal 
Gobind v. Kallu ... 

. v. Ryan 

Gobindpersbad v. Dwarka 

Gocool v. Pooran 
Godfrey v. Chadwell 

Golam v. Alia 

Gopalchand v. Prosonno 
Golla . Kali 32, 78, 

Goluck v. Nobongo 
Goluknatb . Premla 
Goodman v. Grierson 
Gookuldas v. Kriparam 
Goomani v. Ram 
Goonoraoney v. Basanta 

- -,-, 71 



Goordyal v. Hunskoonwar 



Page. 




Page. 


... 61 


Gopal . Desai 278, 


284, 286 


... 435 


~ v. Gunga ... 


.. 373 




. Krisbnappa 


... 521 




. Purshotam 125, 


411, 447 


... 443 


v. Trimbak 


... 528 


... 159 


Gopallall v. Pitambar ... 


... 264 


... 453 


Gopee v. Lukbee 


... 139 


... 213 


v Sebun ... 


.. 140 


... 251 


Gopeenath 11. Sheosabay... 


131, 134 


... 458 


Gopibundhoo v. Kallipuddo 


140, 378 


... 530 




394 


... 294 


Gordon v. Horsfall 


... 163 


... 405 


v. James 


.. 392 


... 285 


Gore v. Stackpole 


... 434 


.. 530 


Gour v. Sabay 


... 309 


191, 234, 


Gouree v. Blioolee 


,,. 277 


236, 528 


Gourmani v. Reed ... 


... 435 


... 416 


Gournarain v. Brojonath 


... 371 


251, 268 


Govind . Gooroochurn 


... 434 


259, 267, 


v. Kalnack ... 


125, 191 


477 


Govinda v. Jesha . . 


.. 65 


... 370 


Govindo v. Mnshun Ali 


... 335 


... 380 


Govindrav v. llavji 


... 383 


373, 475 


Graham v. Walker 


... 468 


... 435 


Grant v. Ellis ... ... 


... 523 


.B. 


Grantham v. Hawlev 


... 77 


101, 429 


Greaver M. Co. v. Willyms 


... 163 


... 223 


Greaves v. Son'eld 


... 399 


... 294 


Greender v. Mackintosh 333, 


337, 428 


... 196 


Greene v Forster ... 


... 477 


232, 234 


Greenongh v. Littler 


... 166 


353, 472 


Gregg . Arrot ... 


... 370 


... 271 


Gregson, In re ... 


... 451 


... 291 


Gris v. Ramessuree 


... 162 


191,525 


Guan v. Jawana .. 


... 524 


... 243 


Gujjunfiir v. Mahomed ... 


... 5-29 


251, 527 


Gujiidhur v. Naik ... 


... 489 


... 366 


Gulub v. Peminan 


... 171 


250, 262, 


Gulabchand v. Dhondie 


... 396 


286, 344 


Guneswar . Mahabar ... 


... 191 


344, 372 


Gunga ?;. Hurrish 346, 


373, 472 


... 476 


v. Luchman ...271, 


276, 458 


... 267 


Gungadhara v. Shivaroma 


136, 373 


... Ill 


Gungagobind v. Ashootosh 


... 222 


, 188, 447 


,. U 1111,11 1 *3f? 


155, 214 




... 262 


Gungapershad v. Beliarylall 


... 123 


374, 395 


T, 17* Hff\ 


264, 296 




197, 200 


Gungaburry v. Ragliabram 


... 32 


... 201 


Gunoo v. Lutafut .. < 


... 90 


.., 162 


Guruprasad v Binda 


.. 335 


... 530 


Gnrusami v. Samurti 


... 166 


... 266 


Gurusamy v. Swamiuilba 


... 200 


... 247 


Gyaram v. Baroda ... 


... 277 



TABLE OF CASES CITED. 



XXI 



H. 

Ilabibullah v. Nakched ... 

Hakeem v. Beejoy 

Hales v. Cox 

Halifax, Exp. 

Hfill v. Hewnrd 

Hall & Co., In re 

Hallefc v. Furze 

Halliday v. Holgate ... 

liamed v. Bindabun 

Hamir v. Zakia ... 

Hampton v. Hodges 

Hanumaiiprosad v. Babooee 

Haran v. Dinobundhoo 
Harbidge v. Wogan 
Ilardeo v. Hukain 
Hardinge v. Tingey 
Hardy v. Reeves ... 
Hari v. Biilambhnt 

v. Mahaduji 

v. Monmobini 

v. Sitaram 
Harirain v. Danaput 
Harlock v. Asbberry 



Page. 



Harper v. Godsell 
Harris v. Poyner 
Harrison, Exp. .. 
Harsabui v. Cliuni 



Harsoon v. Jawadoonnissa 
Harsukb v. Meghraj 
Hart v. Taraprosonno 



... 528 
... 409 
... 472 
... 76 
257, 305 
... 408 
... 494 
... 358 
... 380 
... 139 
... 455 
. . 93 
135, 151 
.. 67 
.. 177 

282 

523 

244. 287 

522 

374 

312 

... 325 
233, 490, 523 
525 

... 367 
... 337 
.. 466 
276 



Harter v. Column 
Hartley, Exp. ... 
v. O'Flaberty 

Harwood, In re ... 
Haslia v. Jesba ... 

v. Ragho ... 

Hasbim v. Awjeet 
Hasbun v. Ramdbone 
Haydon v. Kukpatrick ... 
Ilayley v. Bartlett 
Hnzir v. Sonamonee 
Hazrab Begum v. Hussaiu 
Fleabes v. MacMurray ... 
Heatb v. Crealock 

v. Pugb ... 

Heeralul v. Janokee 
v. Oozeer 



Heera Singh v. Raghunatb 
v, Salioo 



.. 184 

127 

150, 170, 177, 
492 

386 

... 472 
349, 352,441, 
472 

445 

65 

... 529 
... 250 
... 294 
370, 371 
... 356 
... 335 
... 47 
... 311 
429, 491 
... 490 
103, 165 
341 



... 250 
196, 290 



Page. 
65 
167 
221 
139 
249 
59 
456 

90, 389, 391, 
407 

... 472 
... 410 
... 461 
87 

278, 284, 525 
... 461 

Himalaya Bank v. Simla Bank ... 530 
Hitnmat v. Sewa Ram ... ... 528 

Hine v. Dodd 408 

Hinganghat M.Co. v. Rekchand 5-25 
Hippesley v. Spencer ... ... 455 

Hirachimdv. Abdul ... 251,344 



Hemcbunder v. Kallychuru 
Hemendro v. Rajendro ... 
Henderson v. Royal B. Bank 
Ilendry . M titty 
Henley v. Stone 
Hermann v. Hodges 
Henie &c. Co., In re 
Hewitt 0. Loosemore 

Heyman v. Dnbois 
Ilicks v. Powell ... 
Hickson v. Darlow 
Hiern v. Mill 
Hill, Exp. 
v. Kirkvvood 



v. Bhaskar .. 

Hiralal, In the matter of 

Hirdy v. Alloolu 

Hoare v. Parker .. 

v. Stephens 

Hockly o. Bantock 

Hodgson v. Dean 

Holdenby v. Spoffortb .. 

Holmes, In re ... 

v. Mathews 

Holroyd v. Marshall 

Hood v. Easton ... 

Hoole v. Smith ... 

Hopkinson v. Rolt 

Hori v. Shaperji ... 

v. Grish 

Hormasji v. Mankuvarbhai 

Home & Hellard, In re 

Hossein v. Donzelle 

Howard v. Harris 

Hughes v. Delhi & L. Bank 

w.Howard 

v. Williams 

Hughes' Trust, In re ... 
Hugill v. Wilkinson 
Hukeera v. Khaja 
Hulas v. Pirthi 
Humphreys v. Harrison ... 
Hungerford v. Clay 
Hunoounan v. Koonwarree 

v. Kali 

Hunt v. Klines ... 



373 
139 
253 

366 
490 
85 
408 
91 
512 
65 

412, 413, 414 
... 312 
... 460 
383,471 
... 268 
,.. 3-J1 
.. 410 
.. 471 
.. 489 
21, 198 
.. 476 
.. 102 
. 377 
.. 512 
.. 525 
.. 139 
,. 489 
,. 455 
,. 289 
,. 139 
. 214 
391 



XX11 



TABLE OF CASES CITED. 



Page. 

Hunter v. Myatt 483 

v. Walters 408 

Hurdeo n. Gunesbee ... 251, 477 

Hureebur v. Dabee ... ... 250 

Hurruck v. Mabamed ... .. 435 

Hurry . Lnkshman ... ... 312 

Hyde v. Dallaway 525 

Hyder v. Hossein 287 

I. 



Jcbbaram v. Govindram 
Iman v. Oograb 
Imdad v. Mannu 
t? Tasadduk 


... 530 
252 
196,211 
529 
Ricbards 164, 
467 


Incorporated Society . 


Indar v. Naubat 
Indercbund v. Agra Ba 
Indurjeet v. Brij Bilas 


447 
nk ... 334 
213, 498 
435 
382 
163 
386 
67 
139 
278 
185,311 
277 
371,381 


I niiKin v. Inuiiin 


Ireson v. Denn 
Irnbam v. Cbild 
Isban v. Buksbali 
v. Sbujan 
Isberwood, Exp. 
Issur v. Kenaram 
Itcbaram v. Raiji 



J. 

Jafree . Ganga 288 

Jagana v. liagu ... ... 481 

Jagat . Dbundby ... ... 160 

i . Jagrup ... ... 159 

v. Tulsiram 335 

Jagatuiobini v. Sokeemony 103, 302 
Jajyivan v. Sbridbar ... 117, 461 
Jagut v. Qutub ... ... 344 

Jaijit v. Gobind 304, 307, 310, 468 

Jai'lbn v. Hnji 84,88 

Jamal v. Mnliomed 299 

James . Rice ... 87 

Jamiyatram v. Parbbu ... 333 

Janki v. Jaboruddin ... ... 186 

v. Baldeo 127 

v. Bndri ... 159,193 

v. Mantangui ...373, 497, 530 

Janmnjay v. Dastnoui ...131, 161, 162 
Janoji v. Janoji ...304, 309, 479 

Jason v. Eyres ... 21 

Jatlianaik v. Venkatapa... 140, 144 
Javberbai v. Haribai ... 151 



Jayanti v. Yerubandi ... 
Jeebunissa v. Umutcbunder 
Jenner-Fust v. Needbam 
Jennings v. Bond 

v. Jordan 

v. Ward 

Jeora v. Hookum 
Jhabburam v. Girdbari ... 
Jbaroo v. Rajcbandra 
Jbujjo v. Hurrnck ... 

Jbuver Bai v. Narain 
Jivaji v. Kaka 
Jivandas v. Framji 
Joala w. Hurbens 
Jogendra v. Rajnarain 
Jogeswar v. Nitaicband 
Jobnson, In re 

v. Fesenmere 

v. Webster 



Page. 
103 
409 
490 

.. 433 
238, 386 
22, 245 

222 

277, 457 

435 

290 

249 

312 

81, 85, 88, 398 

106 

298, 299 
... 121 
... 326 
... 163 
... 501 
487, 512 
... 5)3 
... 486 
358, 407 
... 366 
... 284 
... 389 
... 278 
... 93 
... 310 
... 65 
... 127 
405,514 
248 



Jolmstone v. Cox 

Jones v. Gibbons 

v. Griffitb 

v. Smitli 

Jonmejoy v. Watson 
Joomna v. Joyaratn 
Jordon v Srnitb 
Jowabur v. Sultan 
Joykalee . Sbibnatb 
Joymungul v. Stirdeen .. 
Joynes v. Stratbam 
Jnala v. Khnniur ., 

Jugdeo v. I3rij IBebari .. 
Juifganatb v. Apaji .. 
Jugjewan v. Ranidass, 275, 306, 307, 

311 

Juseemuddeen v. Hurrosunderri 2CO 
Juswant v. Sreekisben ... ... 280 

K. 

Kadir v. Saligram ... ... 476 

Kailas v. Foolcband ... .. 435 

Kaleedas v. Hutcber 223 

Kuleepershadtt. Raye Kisboree... 170 

Kali v. Kamini 227,345,476 

Kalidass v. Arsbad ... ... 138 

v. Lalmobun ... 171 

Kalikunto v. Roinoni ... ... 165 

Kiilikumar v. Prankisbori ... 218 

Kaliprosad v. I3nli Singb ... 435 

Kalka v. Cbandan ... 436,514 

Kiillacolathuran v. Subburaya ... 530 
Kally v. Kunja ... 161, 170 

Kamala v. Pitcba 278 



TABLE OF CASES CITED. 



XX111 



Ivamini v. Kali ... 
v. Ramloclion 



Page. 
... 481 
... 145 
... 523 
... 518 
... 285 
... 242 
... 91 
136, 530 
... 519 
... 518 
... 114 
... 263 
... 213 
182, 435 
... 366 
... 145 
... 247 
... 398 
65 



Knincnana r. Uhembnikandy 
Kunura v. Govindan ... 
v. Ryrappar 
Kanaylal v. Pynrab.ii ... 
Kanhialall v. Hossain ... 
Kanitkar v. Joshi 
Kannn v. Koinbi 
Kannoth v. Vaimathan 
Kannye v. Niatariny 
Kanye w. Khetter ... 

Karnn v. Mohan ... 

Karoolnl v. Dataram 
Kartick v. Gopal 
Knsan v. Pranjivan ... 
Kaseenath v. Bheekharee 
Kashavji v. Frainji 
Kashinath v. Hurrihnr 
Kassimmunnessa v. Nilrottan 146, 248, 

435 

Kassinath v. Chundy ...62, 64, 65, 67 
Kattarauri v. Padalu ... ... 528 

Kaveri v. Ananthayya .. 405 

Keat v. Phillips 379 

Kedari v. Atmuram ... ... 414 

Kedarnath v. Shamlall ... 79, 81, 88 
Keech . Hall ...248, 289, 463 

Keenhyalall v. Dadalee ... 249 

Kehoe . Hales 382 

Keith v. Butcher 476 

Kellu v. Pnapalli 518 

Kelsall v Freeman ... 103, 302 
Kemp v. Westbrook ... 356, 364 

Kendall v. Hamilton 167 

Kensington, Exp. ... ... 85 

Kershaw v. Kalow ... ... 460 

Keshava . Keshava ... ... 517 

Kesree . Seth 253 

Kesubrao v. Bhowaneejee ... 117 



Kettlewell v. Watson 
Kewal v. llashnarain 
Keys v. Williams 
Kharag v. Bhola 
Khedoololl v. Rutton 
Khelut Chunder 



90, 410, 439 

285 

75,85 

480,481 

202 

v. Tarachurn, 195, 
234 

...125, 190, 191 
144, 145 



Khemji v. llama 
Khevraj v. Linjraya 

Khubchand v. Kaliandas 129, 131, 134, 
149, 150, 156, 446, 476 

v. Liladhor ... 222 

Kburram v. Bbowani ... 481 



Page. 

Khiisul v Jankee 271 

Khyaleeram v. Ramdyal ... 290 

KMar v. Ulfat 523 

Kinderly . Jervia ... ... 353 

King v. Hoare ... ... ... 132 

v. Kins 4."7 

v Smith 207, 455 

Kinlock v Collector of Etawiih... 414 
Kinsman v. Kinsman ... ... 435 

p. Rouse ... ... 524 

Kiniiram v. Hosain ...317, 318, 336 
Kirkhmn . Smith ... ... 375 

Kirteechunder v. Anathnath ... 107 

v. Rajchunder ... 61 

Kishenbullubh v. Belasoo 216, 248 
Kishendatt v. Mnmtazali 95, 98, 99 
Kisliorebhat v. Jorabhai ... 398 

Kislito v. Bnjraj 278 

Kniuht v. Davis 359 

Kokil w.'Dulicliand 
- v. Mitterjeet 
Komola v. Niirainee ... 
Komlayya v. Gurnvappa 
Kondi v. Dakshiiaraurthi 
Kooblall v Nitya 
Korban r. Pitumbari 

Kota v, Alibeg 

Kower Sing v. Dullun 

Krishen Pertab v. Nundcoomar 

Krishna v Hurry 

v. Muttu 

- v. Shankara ... 



131. 



Krishna]! v. Sitamm 
Krishnama v. Perumal 
v. Srinivasa 



143 
248 
265 
397 
435 
61 
528 
530 
272 
350 

... 477 
... 373 
... 519 
... 448 
... 138 
193,526 
... 435 
... 120 
165,351 
... 175 
... 478 
527 



Kri.slmappa v. Bahiru 
Krishtolal v. Bonomali ... 
Kristodass P. Ramkanto 
Kristokishore v. Ituplall 
Kristouiohiny v. Bamachurn 
Kubair . Atmaram 
Kullyan v. Sheonundun, 293, 296, 313, 

468 

Kumini v. Parkam ... ... 517 

Kundu a. Impiclii ... ... 520 

Kunliamu . Keshavan ... 517 

Kunj v. Ilahi 482 

Kunju v. Munavikrama ... 519 

Kuppaiya v. Tliasamatliasi ... 172 

K u ray v. Puran ... ... 25* 

Kuruthasami v. Juganatha ... 268 

Kussoo v. Thakur ... ... 119 

Kuvarji v. Moti 345 



XXIV 



TABLE OF CASES CITED. 



L. 

Lachman w. Dipcband 530 

v. Saligrnm ... 318,476 

v. Koteshar 373, 416, 435 

Lagananda v. Ramavame ... 93 

Lake v. Gibson 337 

Laksbmnn v. Huri ... ... 299 

. Sattyabbaraa ... 426 

Lakshmandas v. Dasrat 32, 408, 433, 
434, 529, 530 
197, 200 
... 524 
... 140 
... 72 
232, 2,34 
... 192 
... 481 
... 435 
529, 411 
529 



Lakshmi v. Srikrishna 

Lala Mai . Gulara 

Lalcband v. Gumtibai 

Laljee v. Gobindram 

Lall Mobun v. Prosuno 

Lall Money v. Jadu 

Lalli v. Ramprosad 

Lain Mulji v. Kasbi Bai 

Lalubbai v. Bai Anirit 

Lalun Monee v. Sona 

Land-owners, &c. Co. v. Asbford 301 

Langton v. Horton ... ... 65 

. Waring 355 

Exp. 85 

Lanoy v. Duke of Atbol 353, 472 

Laru . Golub 136 

Leatbom v. Amor ... ... 415 

Lee v. Howlett 512 

Leigh . Burnett ... 96, 98 

. Dickson 338 

Lekraj v. Becbaram 139 

v. Mabatab 366 

Leonino v. Leonino ... ... 349 

Leslie, Exp 337 

v. Frencb 382 

v . Land M. Bank ... 192 

Lilamonji v. Vasudev 268 

Linden, Exp. , 337,440 

Lindsay v. Lynch 71 

Liverpool M. Co. v. Wilson ... 353 

Lockhart v. Hardy ... ... 226 

London, &c. Co. v. Rankin ... 383 

Longet . Scawen ... ... 200 

Lootifali . Goozraz ... ... 284 

Lootnarain . Sowkbee ... 100 

Lord Southampton's Estate, In re 513 
Lotfbussein v. Abdul 222, 270 

Lows . Telford 463 

Lucbmiput v. Land, &c. .. 166 

v. Mirza 120 

Luchmi v. Asmau 170, 171, 175 

v. Bikratu ... ... 175 

Luckmun v. Rumzan 524 



Page. 

Ludlow v. Grayall 337 

Luke v. South, &c. ... 168,169 
Lutafat Hossein 17. Mahomed ... 313 
Lyons v. Skinner ... ... 263 

M. 

322, 



Mackreth v. Symmons 
Mackintosh v. Hunt 

v. Wingrove 

Macnaghten v. Bhikaree 

v. Mewalall 

Macnolty v. Fitzherbert 
Madar v. Subbarayalu ... 
Wadhabananda v. Ganesh 
Madho v. Gajudhur 

17. Katwari 

v. Sidhbinuik 

Madhoo v. Purshan 
Madbub v. Gungadhur 
- v. Jhoonuck ... . 
Madras D. Society v. Passanha 
Mali Bibi v. Motan 
Mahadnji t?. Vyankaji 
Mahadu v. Bhugiratti 
Mahammad v. Abdul ... . 
Mahomed v. Banee 

v. Brojo ... , 

v. Dhundur ... 

v. Karamut ... . 

v. Ram Lall ... 

v. Shaista 



v. Sona 



Mahommed v. Gijibhoy 
Mahtab v. Collector 
v. Misree 

v. Santlal , 

Makhun v. Jasoda 
v. Sreekishen 

Malabar v. Dayaram 

Mallik v. Mallik 

Manavikrama, Zamorin v. Soorya 
Manchursa v. Kamrunisa 
Mangloo v. Raghoo 
Mangniram v. Dowlut ... 

Manickya v. Baroda 
Manir-ud-din v. Muhammad ... 
Manjerain v. Tara 
Mankee v. Munnoo 

v. Naunko 

Manly v. Patterson 
Mansab v. Gulab 



324, 440 
... 481 
... 481 
... 481 
223, 454 
223, 454 
... 337 
... 397 
... 375 
... 220 
... 492 
... 499 
... 109 
63, 65 
... 136 
460 
524 
... 529 

287 

264 

244 

366 

477 

430 

151 

328 

192 

... 244 
278, 288 
252, 253 

254 

262 

288, 293, 294. 
296, 468 

239 

242 

193 
299 

... 159 
... 126 
.. 478 
... 523 
... 94 
.. 234 
... 229 
1 95, 230 
447, 479 



TABLE OF CASES CITED. 



XXV 



Mansur w. Sarju 
Marakar /;. Munhoruli ... 

- v. Parameswaran 

Marana ?. Pendiyalla ... 
Marquis of Bute 0. Cunningham 350 

474 



Page. 

... 263 
193, 518 
... 528 
253 



Marsh v. Lee 

Martin v. Pnrrisr.nm ... 

v Reid 

Martinez v. Cooper 
Martinson 0. Clowes ... 
Martina v. Cooper ... 
Mashook v. Maren 
Massim o. Shamdoss 
Massimunnessa v. Nilratnn 
Matadeen 0. Mussoodeeu 
Matba v. Lumi 
Mathews v. Blackraore 
Mathura 0. Anund 

. v. Chunder 

v. Krishna 

v. Luggon ... 
Matoji v. Huseu 
Mavulali v. Gundu 
Maxwell v. Mountacute .. 
Mayavanjari v. Nimini . . 
Mayer v. Harding ... 
Mayilaraya v. Subba 
Mazhar v. Sarder 
McCorkindale, In re 
Meeraleem v. Alif 
Meer Boonead v. Deendyal 
Meesom v. Clarkson 
Meyerstein v. Barber 
Miller v. llunjjo ... 

Mills 0. Jennings 
Miln 0. Walton 
Mirza v. Gregory 

v. Tarasoonderee 



... 385 
... 124 
... 355 
... 163 

23, 460 
. 391 
268, 272 
... 409 
... 162 
... 388 
... 394 
... 445 
... 435 
... 144 
... 348 

.. 481 
.- 481 
... 242 

.. 65 
... 518 
... 489 
245, 278 
... 481 
... 330 
52 

... 290 
... 440 
... 355 
190, 121 
... 386 
... 395 
... 172 
251, 258, 
286, 290 

76, 414 
112 



Misrilal v. Mazhafer, 

Miterjeet v. Rajchunder 

Modun v. Ashad 229, 233, 234, 235 

Moliabir v. Gangadhar ... 405 

Mohained v. Dilwar ... ... 524 

v. Shewak 344 

Mohan v. Togu Uka 144, 145, 151, 477 
Mohanund v Govind ... ... 203 

Mohesh v. Chanhorja ... 276, 285 

v. Hurry nath ... 107 

v. Kaminy ... ... 57 

. v. Mohuut 375 

' v. llamprosonno ... 317 



Page 

Mohesh v. Tarinee 264 

Moheshur v. Bhikha 188 

Mohimachunder v. Ram, 138, 139, 476 
Mohindro v. Soshi .,, ... 107 

Mohinudin v. Mansher ... 46 

Moliun v. Brojo ... ... ... 216 

v. Goluk ... 292, 294 

Monkhouse v. Corp. of Bedford 489 
Monohur v. McNnghten ... 333 

Montgomery 0. Calland ... 164 

Moraker v. Punja 259 

Moran v. Mitu ... ... 320, 321 

Mores v. Conham 358 

Morgan 0. Parry 221 

Mortit, In re 358 

Mostyn v. West Mostyn, &c. ... 66 

Mothooru v. Nathoom ... ... 151 

Mower's Trust, In re ... ... 473 

Muddun v. Gokul .. .. 142 

Mudhusudun v. Mukundloll ... 186 
Muhammad v. Mansing 409, 476 

Mnjeedunissa v. Dildar ... 250 

Mnkkanni v. Manan 523 

Mukund v. Goluk ... 292, 313 

Mulchand v. Balgobind .. 416 

0. Lallu ... 370, 373 

Mulik 0. Dhana Bebee 251 

Mullick v. Goor 90 

Mulliner 0. Florence ... 365, 367 

Mumtazudden 0. Rajcoomar, 130, 131, 

133, 139, 160 

Munchaiji 0. Kongseoo ... 409 

Munickchand 0. Beharee 90, 447 

Munnolal v. Reetbhoobun,275, 283, 285 
Munnoo 0. Choonee ... ... 388 

0. Pigue 189 

Mupana 0. Virupa 520 

Muttyloll 0. Annundo 65 

Mutual, &c. Co. v. Longby ... 340 

Mutual, &c. Society v. Lsingley 483, 

484, 486, 512 

Mutungini 0. Ramnarayan ... 120 

Muyeedan 0. Dildar 285 

Muzhur 0. Hurpershad 243 

N. 

Nabira 0. Achampat ... ... 528 

Nadir v. Pearoo, 61, 119, 131, 186, 192 

Nafer 0. Baikanto ... ,,. 177 

Najibulla v. Nasir 90 

Nallana 0. Palani ... 197, 200 

Nana v. Anant 528 

Nanack 0. Teluck ... 142, 162 



XXVI 



TABLE OF CASES CITED. 



Nandram v. Balaji 

Nnra v. Gulab 

Narain v. Cbait ... ... 

. Datarain 

. Ochufc 

Nn rain Kumnree v. Shona 
Naran v. Dolatram 
Nararia v. Kendiala 
Narasayya v. Guruvappa 
Narayan v. Gonesli ... 

v. Makunda ... 

- . Narayana ... 

. Pandurang ... 

v. Rangu 

v. Satvaji 

Nnrobari w. Vithal 

Nash v. Eads 

v. Palmer 

Nathu v. Ameer 

- v. Mulcliand ... 

National Bank v. United, &c. Co. 163, 

National P. Bank v. Gomes 

Navi v. Raghu ... 
Nazir v. Mehidi . 

Needier v. Deeble 
Neelacanta t;. Sliooresh 

Neesoin v. Olarkson 
Nellaya v. Vadakipat ., 
Nesbitt v. Tredennick ., 
Neve v. Pennell 
Newbould v. Smith ., 
Newlove v. Shrewsbury 
Newman v. Newman 
Newmarch v. Store 
Newton v. Beck 

v. Chorlton .. 

i v. Newton 

Nidliilall v. Muzahar .. 
Nikka v. Suliman 
Nilcanta v. Peary 
Nilkant v. Joynedin .. 
Nilopandurang v. llaraapnttoji 

Nives r. Nives 

Nobin, In the matter of 
v. Magon 

v. Romesh 

i i v. Rungolall ., 

Nogender . Kaminee, 1 38, 31 6, 3 1 7, 476 

Noorali v. Koui ., 



Page 


Page 


... 528 


Norotnm v. Sheopergush ... 122 


... 136 


Norender v. Dwarka 136, 214, 219, 


... 481 


220, 264 


32, 530 


North, &c. Co. r. Manchester, &c. 


... 372 


Co 450 


... 333 


Northern, &c. Co. v Whipp 390,391, 


32, 136 


469 


... 269 


Nowakoowar v. Abdul ... 351, 353 


... 528 


Nowuzush . Woosul ... ... 264 


... 342 


Noyes . Pollock ... 291,311 


... 113 


Nuddiarchand v. Iloopdas ... 217 


. . 519 


Nufier v. llamlal 435 


387, 476 


Nundlall v. Ualuk 281 


... 300 


v. Prosunno .. ... 64 


... 287 


v. Kulliana ... 278, 285 


256, 258 


Nunjandepa v. Gurulingapa ... 477 


23 






... 458 


Nnra v. Jagat ... ... ... 496 


... 252 


Nurjoon v. Moorzeer-ood-deen 302 


... 483 


Nursidass v. Joyilekar ... ... 130 


. Co. 163, 


Nursing v. Roghoobur ... ... 178 


494 


Nuthu v. Showki 166 


... 496 


Nnthubhai v. Mulcliand ... 287 


i ... 392 


Nuzarally v. Oojoodbyaram 103, 302 


... 298 


Niizeerun v. Ameer ... ... 139 


... 483 




... 476 


O. 


, 148, 214 


Odny Churn v. Bhujohury ... 385 


434, 435 


Oditperkash v. Martindell ... 275 


325, 337 


Official Receiver v. Tailby ... 414 


278, 519 


Okhil v. Dnolichand ... ... 147 


96, 453 


Omachurn i>. Behary ... ... 212 


84 


Oojooderam . Aushootosh ... 103 


... 523 


Oomrao v. Nizam ... ... 243 


... 450 


Oo-Noung v. Moung II toon -oo 73, 81 


... 512 


Ord v. Skinner 126 


... 345 


Otter v. Vaux .. 103, 104, 370, 377 


... 377 




... 342 


P. 


.. 468 


Paidal w. Parakal 518 


... 109 


Pahnr v. Jaichand ... ... 159 


.. 303 


Palani v. Selambora ... ... 61 


... 92 


Palmer v. Carlisle ... .. 456 


... 310 


. v. Hondrie 226 


ji 345, 


Panclii v. Ahmedulla 528 


'373, 375 


Pattabliiramier v. Vencatarow, 217,240 


166, 498 


Pandab v. Jennuddi ... ... 406 


... 405 


Pandji . SudashSb ... ... 251 


... 167 


Parbhu v. Mylne 448 


... 482 


Parbutty o. Moliamed ... ... 65 


... 317 


Parladh 0. Broughtpn ... 296,313 


317.476 


Parkar v. Clarke 515 


... 489 1 


1?. Watkins ... 302. 464 



TABLE OF CASES CITED. 



XXV11 



Parkinson P. Hanbury ... 
.Parry w Wright ... 

Parsons, Exp 

Parsotam p. Mulu ... 

Parvati p. Kisan Singh ... 
Patching p. Bull 
Pearce o. Mori-is 

- v. Gobind 
Periandip p. Angapa 
Perlad p. Chondi 
Perlathail p. Mankudi 
Perrin p. Blake 
Perry-Herrick p. Attwood 
Perry v. Walker 
Pertaub p. Ashlam 
Fetch p. Tutin .. 
Peter v. Russel ... 

Peto p. Hammond 
Phelooinonee v. Greesh ... 
Phene p. Gillan .. 
Phillips P. Phillips 
Phulkuar p. Murlidhur ... 
Piari p. Khiali ... 

Pile v. Pile 

Pinnock p. Bailey ... 

Pitambur p. Ramsaran 

v. Vanmali ... 

Platt v. Mendel 

Pledge p. Buss 

Pohpee p. Clieda 
Ponnappa p. Pappuryyanagar 
Poorna p. Prosmino 
Portmore P. Morris 
Popple v. Sylvester 
Poran p. Harsaram 
Poresh P. Anathnath 
Potlionier v. Dawson 
Powell P. Wright 
Praed p. Gardiner 
Prainntan p. Madutil 
Pranjivan c. Baju 
Prannath p. Rookca 
Prosaddas p. Ramdhone 
Prasunno p. Hnran 
Price P. G. W. Ry. Co. ... 

p. Cooper 

p Price 

Probhakar p. Pundurang 
Proctor p. Cooper 
Puddotnoney p. Muthooranath 

Pugh v. Heath 

Pullukdharee P. Mohabir 
Pultun v. Reshal 



Page. 
460, 467 
... 370 
... 356 
... 456 
... 435 

... 257 
... 189 
... 268 
... 277 
... 273 
... 124 
.. 391 
... 312 
... 73 
... 415 
... 391 
138, 389 
... 64 
... 359 
379, 410 
285, 446 
... 446 

94, 461 
... 512 
... 205 

23, 117 
... 483 
... 340 
... 275 
... 166 

.'.'.' 67 
... 131 
... 375 
... 448 
... 359 
... 139 
361. 36-2 
... 517 
100, 435 
... 262 
... 211 
... 214 
.. 126 
... 525 
... 433 
... 291 
... 408 
,335,336 
233, 525 
... 396 
... 281 



Punchun p. Aliahmed 

v. Mangle 

Punjun v. Ainiu.i 
Puriag p. Fekoo ... 
Purmanund p. Jamna 

- P. Jamabai 

Punnessari p. Nobin 
Pursotam p Chiangi 
Puthen P. Govendam 

Q. 

Quarrell p. Beckford 

R. 

Radha p. Monohar 

v. Parbutty 
Radhabai P. Anantrao 
p. Shamrav 



Page. 

250, 344, 347 
219, 477 
282, 287 

278 

... 460 

.. 233 

170, 174 

214 

269 



479 



156, 157, 162, 
248, 416 

205 

112 

136, 226, 248 



Radhabanode v. Kripamayee 288, 304 
Radhakant p. Bhagwun ... 313 

p. Mirza 170 

Radhanath p. Bungo ... 260, 264 
. - v. Gisborne ... ... 269 

lladhasham p. Shivu 433 

liadhey P. Bujah .. 217,247 

p. Mahesh ... ... 429 

Radhika r. Radhainani ... .. 435 
Ilndji p. Kal uram . .. 268 

Rafferty p. King .. 525 

Ragho v. Anaji ... . 299 

p. Balkrishna, 251, 257, 258, 477 



- p. Balvant 387 

Raghu P. Ashruff 468 

Rajrhubar p. Budhiilal 268 

Ragunatli p. Jurawan 142, 344, 497 

p. Kakan 192 

Raghunath v. Luchmnn... 292, 304 
Raliiimutoolah p. Shuriatoolah... 89 

Raisuddin p. Khadu 223 

Rajaram p. Beni ... ... 156 

Rajchundra P. Huromohun 184, 186 

p. Madhoosoodan ... 366 

p. Manorama, ... 213 
Iliijkoomur P. Ramsuhaye ... 247 
Rajkishen p. Iladhamadab ... 435 
Rajkishore p. Bhadoo .. 162, 170, 351 
Rajkristo v. Biingshee ... ... 139 

Rnjlukhee p. Gokool 388 

Itajnarain P. Sheera ... ... 144 

Raju P. Krishnarao ... 120, 410 
Rakestraw P. Brewer ... .. 96. 97 

Rakhal P. Dwarka 488 



XXVlll 



TABLE OF CASES CITED. 



Ram v. Admed .. 

- v. Dhanauri ... 

y. Sadasiv 

Ramn v. Martnnd 
Ramakrisha v. Namasivaya 
llamapa v. Umniia 
Ramapurath v. Nampurath 
Ramaraja v. Arunachala 
Ramasarai w. Maremuttu 

v. Sauiiya 

Rambaksh v. Ramlall ... 
Rambaluk v. Rarnlal 
Rnmbert v. Colien 
liambhnt v. Laksman 
Rambuksh w. Mohunt . 

- v. Sookhdeo 
Ranacliandra v. Krishna 

. In re 

v. Mahadaji, 

Raincburn v. Jhahbitr 

. . v. Raohoobeer 

Ramcooinur r. McQueen 

,. . v. Prosunno 

Ramdas v. Brijnundun ... 
Ramdhon v. Mohesli 
Ramdin v. Kalka 
Ramdoolal v. Radhanath 
Ramdoolary v. Thacoor 
Ramdoyal . Heeralal ... 
Raindut v. Urn-ruck 
Ramdyal . Bishendyal ... 
llamen v. Kandapuni ... 
Rameshur v. Mewar 
Rameswar v. Jagjeet ... 
Ramgopal v. Rajkishore... 

v. llamdutt ... 

Ramji . Cbintoo ... 

Ramkant a. Brindabun 
llainkaiit.li v. Kalimoban 
Rarakishen v. Kundun . 
Ramkishna, In re 
Rarakristo . Ameeroonesa 
Ramknraar v. Baikontnath 
llamlakban v. Randan ... 
Ramlocban v. Knnbyalal 

v. Raninarain 

Rammanick v. Brimlaban 
Ramnaraiu v. llamcnnny 
Ramnatli v, Baloram 
Rampersbad v. Kishen ... 
Ramroop v. Tbakoor ... 
Ramruttun o. Umed 



Page. 


Page. 


... 298 


Ramsaran v. Amrita ... 200, 244, 


... 397 


252, 416, 435 


... 496 


Ramsbet, v. Pandbay 299 


... 244 


Rarasidb v. Balgobind 91, 189, 191, 


... 167 


447, 499 


... 529 


Ilamn v. Subbaraya 142, 370, 372 


... 520 


Rancliflfe v. Parkyns ... ... 472 


... 529 


Ranu v. Rninabai ... ... 247 


32 


Rangasami v. Muttukumarnp 405, 445 


51, 242 


Ranken v. East, &c 113 


.. 477 


Rasaji v. Syana ... ... ... 481 


... '250 


Rasbmonee v, Prankissen 214, 217 


83 


Rasmoney v. Illabee ... ... 202 


... 435 


Ratan v. Hanuman 498 


264, 477 


Ratclifle v. Barnard ... 390, 391 


... 90 


Rautan v. Kadungot ... ... 519 


... 529 


llavji v. Krislmaji ... 145,396 


... 526 


Rayner v. Preston ... ... 432 


249, 435, 


Razeeoodeen v. Jbubboo ... 250 


495 


Redmcyre . Foster ... ... 226 


... 336 


Rees 0. Metropolitan, &c. Works 487 


... 131 


Reeves v. Capper ... ... 355 


... 410 


Rico v. Rice 324, 379 


... 231 


Richards v Johnston ... ... 448 


... 523 


Richardson, In re ... ... 449 


... 178 


v. Younge .. ... 524 


190, 446 


Rives v. Barlow ... ... ... 415 


... 65 


Roberts, In re ... ... ... 448 


... 528 


v. Wyatt 356 


65 


Robertson v. Norris ... 23, 309 


... 317 


Rodlnnal v. Ramharakh ... 351 


... 64 


Rogers v. Cballis 59 


... 518 


v. Humphreys ... 463 


... 138 


Roghoonnndon v. Wilson ... 139 


... 216 


Rollason, In re ... ... ... 358 


... 219 


Rolt v. White 515 


... 124 


Rookni v. Brojo ... ... ... 151 


... 299 


Rooplal v. Moliima ... ... 93 


165, 166 


Iloopnarain v. Madhub ... 260, 264 


... 305 


Roscarrick v. Barton ... ... 24 


... 292 


llujihunath v. Gridhari ... ... 310 


525, 526 


Runjeet v. Dhookhin ... .. 290 


251, 257 


Ilupchand v. Balvunt ... 193, 251 


... 334 


v. Davlatrav, 136, 163, 530 


... 325 


Rtiploll v. Ramlocban ... ... 81 


... 293 


Russel v. Russel ... .. 84 


354, 435 


Rutnessur v. Jusoda .., ... 488 


... 302 


llutton . Greedharee ... ... 278 


... 73 


Ryesatnlla r. Durga ... ,.. 380 


148, 149 


a 


... 288 


o. 


244, 284 


Saadat v. Collector of Savon 1 13, 447 


... 170 


Sadabut v. Fullbash 139 



TABLE OF CASES CITED. 



XXIX 



Sadagopa v. llnthna 32. 

Sadagopayyangar . Dorasami 
Sadasiva v. Sabapathi 
Sadashiv v. Vitbul 

Sadler, Exp 

Safdarali v. Lachinui) 
Sahib Perhlad v. Budhoo 
Sahibzada v. Pormeshor... 
Sakamm v. Gopal ... 

SakLaram v. Vitliu 
Sakriarain /. Dliarum 
Salauiat v. Budh ... 
Saligram v. Barun 

v. Bebari 

Salitn v. Boidonath ... 
Sam v. Appundi ... 
Saniarali v. Karimullah ... 
Samathel v. Mather 
Sauii v. Krishna ... ... 

v. Soma 

Sandon v. Hooper, 301, 302, 312, 464, 

Sangappahin v. Basappa 
Satikuna v. Virupakshnpa, 136, 

Santnji v. Bayaji ... 
Santi Ram v. Modoo 
Sarup v. A mi run ... ... 

Sarwar v. Shazada 
Satra Kumaji v. Visram... 
Satrucherla v. Vairicherla 
Sawaba v. Abaji .. 
Sawyer v. Goodwin ... 
Sayet v. Mohamed 
Scholefiel'l v. Templer ... 

Scott v. Tyler 

Seetaram v. llambaksb ... 
Seetul v. Sooraj ... ... 

Selwya v. Garfit ... 

Seth Harlall v. Nanick ... 

Setra v. Vairri 

Sevaraai v. Alibakhsh 
Sha Nagindas v. Halalkore 
Shamaclinrn v. Anund ... 
Shamcoomar v. Jotton 
Shanmarain v. Itaghubar 
Sliankarapa v. Dnnapa .. 
Shankarbhai v. Kossibhai 
Shantapa v. Balapa 

Shaw v. Foster 

v. Neale 

Shearman v. British E. A. Co. 
Shekari v. Mangalom 



Page. 


* 


Page. 


188, 447 


Shekbara v. Rnru 


... 518 


... 528 


Sbeobaksh r. Sheocburn 


182,435 


... 435 


Sheobart v. Dharee 


... 287 


95 


Sheodinl v. Pragdat 


... 120 


... 113 


Sheogolam v. I lam nip, 219, 


248, 252 


396, 529 




205,278 




32 


Sheonarain v. Jai Gobind 


276, 285 


... 313 


Slieopal v. Deendyal ... 


... 244 


252,258 


Sheo Ratan v. Chotay 


... 435 


... 268 


7 Rill 11 ID 111 


125, 447 




... 261 


Sbepard v. Jones 


301,467 


... 387 


Sheshayya v. Annama ... 


... 190 


250, 256 


Sheshgiri v. Salvador 


144, 145 


... 220 


Shib Chandra v. Johobux 


... 530 


...30,58 


Shiblal v. Gangaprasad ... 


... 191 


... 435 


Shidlingapa v. Chenbasapa 


... 529 


279, 404 


Shi vial v. Ramdas 


... 240 


... 246 


Shivram v. Genu.. 


163,397 


... 498 


Shorosheebala . Nundolal 195 


,208,478 


... 267 


Shringarpure v. Pethe ...145, 


381, 5-29 


312, 464, 


Shropshire &c. Co. v. Queen 


... 392 


487 


Shurnomoyee v. Srinatb, 195, 


233, 234 


... 120 


Sbyum v. Cheytaloll 


... 358 


36, 163, 


Sibchunder v Russick ... 


...28,33 


248, 305 


Sibnarain v. Rassik 


... 34 


... 286 


Singh v. Dickson 


.. 326 


... 220 


Sirbadh v. Raghu 


373, 497 


... 192 Sital v. Lacbmi 


... 200 


... 189 Sitanath v. Land M. Bank 


. 167 


... 528 


Sitaraui v. Amirbeguni 110, 


134, 476 


... 273 v. Ganesh 


... 227 


... 205 


Sitaramudu v. Ramanna... 


... 530 


... 104 


Sitla v. Lalta 


... 405 


204, 206 


Sivaratn v. Soohrah 


... 185 


... 396 


Sloane v, Mabon 


... 382 


... 92 


Smith v. Davis 


... 489 


... 139 


v. Olding 


... 483 


... 189 


i- v. Sampson 


242, 299 


... 460 


v. Young ... 


83 


... 220 


Sobhagcband v. Bbaicband, 32, 136, 529 


... 268 


Sobha Sab v. luderjeet ... 


... 254 


... 101 


Solano v. Moran ... 


127, 170 


... 5-25 


Somasundnra r. Sakkarai 


... 394 


... 103 


Soobbal . Nitai 


217,247 


... 139 


Soor v. Dalby ... 


... 312 


59 


Soorjo v. Bhugwan 


... 529 


177,312 


Soorjnn v. Imam ... 


... 284 


... 241 


Sotisli v. Nilkomal 


... 140 


373, 374 


Spencer v. Clarke 


.. 512 


... 86 


Spiekernell v. Hotham ... 


... 525 


... 383 


Spurgeon v. Collier 


... 65 


. ... 382 


Squire v. Ford ... 


... 370 


... 520 Sreeinatty v. Tarachund... 


93 



XXX 



TABLE OF CASES CITED. 



Page 

Sreemunt . Krishna ... 268, 284 

Sreenath v. Hurnath 103 

Srinath v. Gopal 59 

Srinivas v. Vijay... 57 

Sriputty v. Mohip ... ,.. 248 

Sri ram . Bhagirath ... ... 530 

Stafford . Selby 22 

Stanley v. Grundy 311 

Stansfield v. Hobson 523 

Stevens v. Mid- Hants Ry. Co. ... 370 

Stewart's Trusts, In re 165 

Stowell v. Ajudheya 186 

Stringer v. Harper ... ... 349 

Subhabhat v. Vasuderbhat ... 198 

Subraraanyan v. Maudayan ... 253 

Suduth v. Bheenyek ... ... 131 

Sumpter v. Cooper ... 87, 90, 440 

Sungat . Baijnath 481 

Surbomongola v. Sbashi 113 

Surjan v. Jaganath 214 

Surnouaoye v. Land M. Bank ... 315 

Suroop v. Mohender ... ... 222 

Surrefunnisa v. Enayet 241 

Surwan v. Golara ... 61, 131 

Suyeedun v. Zuhoor ... 288, 292 

Swan v. North B. A. Co. ... 78 

- v. Swan 337 

T. 

Tadigollah v. Lakshmamtna 
Tadman . D'Epineuil 
Talbot v. Frere ., 
Tanji . Nacamma 
Tappfield v. Hellman 
Tara Kant v. Puddomoney 
Tarapershad v. Ramnursliing 
Tarinee v. Canada 
Tasaduk v. Beni... 
Tasker v. Small ... 
Tawakkul v. Luchman 
Tayler . Great, &c. 
Taylor v. Mostyn 

v. Palmer... 
Tea<;araya v. Mariappa 
Tebb v. Hodge .., 
Tenison v. Sweeny 
Thaku Beebee, Case of, 
Thames &c. C<>. v. T 
Thompson v. Grant 
Thorne v. Newman 
Thornecroft v. Crockett 
Thorpe, In the matter of 
Thumbusawiuy v. Hossain 



Tidd v. Lister 353, 472 

Tikaram v. Kamiram ... ... 294 

Tillet v. Nixon 463 

Tilockdhari v. Furlong ... 76, 414 

Tippaya . Venkata ... ... 278 

Tipton &c. Co. v. Tipton &c. Co. 301, 

487 
Tirbhobun w. Jhono ... ... 109 

Tombs v. Itock ... ... 473 

Tomlinson v. Bullock ... ... 512 

Tomson v. Bowyer ... ... 623 

Tophan v Boothe ... ... 525 

Torabali v. Khodabuksh ... 119 

Tonlimn . Steere, 370, 371, 372, 373 
Townshend v. Stangroom ... 67 

Tranqueharsami v. Ammai ... 435 
Tremalrav v. Commissioner ... 325 
Trustees, &c. v. Bank, &c. ... 79 

Tukaram v. Ramchundra 178,529 

v. Khandoji ... 120 

Tull v. Owen ... ... ... 525 

Tulsi p. Mnnu ... ... ... 354 

Turner v. Marriott ... ... 440 

Tyler . Thomas .. ... 433 

U. 

Ulfutunnissa v. Hossein 76, 120 

Umamahaswara v. Siugaperunial 167 





Umamoyi v. Tarini ... ... 435 


imtna ... 352 


Umarkhan v. Mahomed .., 526 


447 


Umasundari v. Uma ... ... 121 


451 


Umesh v. Chunchun ... ... 405 


270 






415 


Urnraer v. Abdul ... ... 235 


oney ... 434 


Urnrao v. Beharo ... 162,166 


rsliing ... Ill 


Umrunnissa v. Muhummad 496, 524 


305 


Underliay v. Read ... ... 463 


...293, 296 468 


Union Bank v. Ingram ... 491 


249, 493 


Union It. S. v. National B. S. ... 471 


... 222 


Unity Bank v. King .,, ... 337 


78 


Unnian v. Rama ... ... 519 


478 


Unthank v. Gabbett 370 


368 




l .. 523 


V. 


76 


Vallaya v. Moorthy 120 


394 I Vandaleur v Blagrave 79 


f, ... 275 
nt&c. Co. 365 


Vankata v. Snbrainanya 405, 456 
v. Tirumaia ... ... 225 


488 


Vanneri v. Patan ... 278, 283 


... 337 

t ... 487 


Varden Seth v. Lnclcpathy (IX Moore's 
Ind. Ap|>., 307) ... ... 32 


of ... 381 






ain ... 70 ' 


188 



TABLE OF CASES CITED. 



XXXI 





Page. 


Page. 


Yasudev w. Narayan 


... 529 West, &c. Bank v. Reliance, 


&c., 308, 


Vasudevan v. Keshavan 


... 5-20 


460 


Yatju v. Vatju ... 


... 268 Wheatley p. Silkstone &c. Co. 


.. 471 


Vayalil v. Udaya 


276,519 Whitbread, Exp. 


85 


Vellayay v. Tirna 


... 113 P Jordon 


... 389 


Vencatachella v. Panjau 


... 142 Whitcouib v. Milichin ... 


23 


A'enderzee v. Willis 


361 Wigney p. Wigney 


... 433 


Vengid v. Cliatu 


481 Wilkes p. Saunion 


... 487 


Yenkappa v. Akktt 


197,200 Wilkinson v. Hall 


... 463 


- 11. ('annum 136, 156, 


163, 416 ii v. Simsi'M 


... 370 


. r. Keshaba 


186, 311 Willett . Winnell 


22, 245 


r. Krislinasamy 


... 165 William p. Hoshiiquet ... 


.. 114 


,,, 1 J.niii'i ' 1 1 1 '" 


16 178 r Owen 


197, 340 






Venkatarama v. Chinnathatnbu 529 | Willoughby v. Willoughby 


... 309 


Venkayyar v. Venkata 


529 Wilson v. Metcalfe 


... 479 


Veil kit tu r. Kamba 


... 480 Winter p. Lord Anson 


... 323 


Verner v. Wenstanley 


... 197 Withal p. Nixon 


... 490 


Vernon & (X, In re. 391, 


392, 469 Wolverhampton, &c. Co. p. George 483 


Yinayak v. Raghi 


... 298 Womatul p. Mirunnissa 


... 331 


Vishnu, In re. ... 


... 526 Woiudii P. Ramroop 


.r. 177 


... p. Tatia 


... 100 Wood v. Wheater 


... 490 


o. Kashi ... 


... 493 '' Woodroffe v. Johnston 


... 59 


Vithal P. Daud 


236, 386 Woomasundari v. Raghiinath 


182, 435 


v. Dhondi 


... 483 Worcester &c. Co. p. Blick 


... 500 


- v. Karson 


... 140 Wormald v. Maitland 


... 389 


-. Vishvasrab 


250, 496 Worsley v. Scarborough 


... 43-i 


Vithobu v. Chotalal 


457 Worthington v. Morgan 90, 


389, 390 


Villa v. Klekra 


... 368 Wortley v. Birkhead 


... 385 


Yittobha . Gangarain ... 


231 Wragg v. Denhaiu 


... 291 


Yythi v. Ravana 


... 481 Wrixon P. Vize 


233, 234 




Wazeurunessa v. Saldun 


... 258 


W. 


Wyatt P. Barwell 


... 433 


Wadswortli, In re 


... 330 Wynne v. Styan 


... 525 


Wajed v. Hafez 


... 372 




Walcott v. Condon ... 


... 370 Y. 




Walker v. Jones ... 


ft Yakoob . Rnmdulal 


... 177 


Wallace v. Donegal 
Wallis v. Smith 440, 
Ware v. Lord Bernoulli 
Warner v. Jacob 


433 Yashvant p. Vithoba 
481 482 Yates v. Aston ... 
' 408 Yellappa p. Mantappa 
460 Yenkoba . Rambhaji ... 


244, 387 
... 445 
... 439 
... 191 




309 Young p. Peachy ... 


65 


Watts, In re 


'... 61 




v. Symes 


370, 371 




Wazeer v. Jnguioliun ... 


... 290 Zaberdust P. Inderman 


... 332 


Webster v. Patterson 


... 490 ' Zulens . Debshapu 


... 261 


r. Power 


... 105 Zamorin v. Narayaua ... 


... 527 



LAW OF MORTGAGE. 



ERRATA. 



Page 113, line 4, from bottom, dele ' Suth. ' 
145, line 19, for 'Gal.,' read 'Born. 

1 63, line 1 1 , from bottom, for ' L. It., P. 0., ' read ' App. Cas. ' 
188, last line, for IV, ' read ' V. ' 
192, line 3, for VHI, ' read XVIII. ' 
203, line 2, from bottom, for '119,' read ' 199. ' 
247, line 23, for ' were, ' read ' mere. ' 
270, line 13, for N.- W. P., ' read ' VII All. ' 
278, note, line 15, from bottom, for ' All., ' read ' Mad. ' 
313, last line, for ' Jjuairab Mondal, ' read ( Boistub . Huro 
Narain. ' 



Kennedies of mortgagee may be pursued concurrently Insufficient secu- 
rity English remedy foreclosure, but, sale the more equitable remedy 
Who may redeem Equity of redemption cannot be restrained even by 
express contract Equity of redemption in the case of a second mortgage 
without notice Power of sale Liabilities of the mortgagee Influence of 
civil law Note giving tabular view of the classification of securities in 
Roman law. 

THE history of archaic institutions shows how very 
slowly the most familiar juridical conceptions of the present 
day have been matured. Few persons, I venture to affirm, 
would think of questioning the truth of this assertion at 
the present moment; and yet, even a slight acquaintance 
with legal literature will show, that it is only recently that 
wild speculation and rash assertion have given place to Early his- 
sober reasoning and careful observation. Comparative stations." 
jurisprudence, in a few short years, has accomplished many 
striking results ; but, not the least important of these, is 

R. B. G., M. 1 



LAW OF MORTGAGE. 



LECTURE I. 



Karly history of institutions Doctrine of evolution in law, illustrated by the 
Hindu Will Early notions of security Early law of distress Mortgage 
in early law Possessory lien Powers of sale and foreclosure Real 
security, how distinguished from real right Historical sketch of the Roman 
law of securities Similar notions traceable in early Hindu and Mahommedan 
law Ficlucia Pignus Improvements in the Koman law of pledge, by the 
Prtetorimi jurisdiction, the actio serviana, and the qiiasi-servian action 
External influences which modified the Roman law Growth of real secu- 
rity Power of sale History of the Fiducia The lex commissoria 
Foreclosure in Roman law Three-fold division of securities by Homan jurists, 
into conventional, legal, and judicial I'.ights of pledger and pledgee in. 
Roman law Sale by mortgage Right of redemption Tacking 
Priority determined by time Potestative and non-potestative conditions 
Exceptions to the rule of priority Salvage liens Privileged liens 
Tacit hypothecation in Roman law Hypothecation how extinguished Ex- 
tinction by merger Marshalling in Roman law Effect of the mortgagor 
subsequently becoming the owner Right of subrogation, how acquired 
Extinction of pledge Pledge when redeemable Antichresis Liabilities 
of the pledgor and of the pledgee Pledge in systems founded on Roman 
law Important deviation in continental law English law of mort- 
gage Equity of redemption Bill of foreclosure Decree for sale 
Remedies of mortgagee may be pursued concurrently Insufficient secu- 
rity English remedy foreclosure, but, sale the more equitable remedy 
Who may redeem Equity of redemption cannot be restrained even by 
express contract Equity of redemption in the case of a second mortgage 
without notice Power of sale Liabilities of the mortgagee Influence of 
civil law Note giving tabular view of the classification of securities in 
Roman law. 

THE history of archaic institutions shows how very 
slowly the most familiar juridical conceptions of the present 
day have been matured. Few persons, I venture to affirm, 
would think of questioning the truth of this assertion at 
the present moment; and yet, even a slight acquaintance 
with legal literature will show, that it is only recently that 
wild speculation and rash assertion have given place to Early hi 
sober reasoning and careful observation. Comparative ' 
jurisprudence, in a few short years, has accomplished many 
striking results ; but, not the least important of these, is 

R. B. G., M. 1 



2 LAW OF MORTGAGE. 

LECTUBE the dissipation of the numerous fallacies which once 
L clustered round the early history of law. Experience, 
however, tells us that speculative errors possess remark- 
able vitality; and it would be rash to suppose that delu- 
sions once so common, have wholly died out in our time. 
The tendency to confound the earlier stages of law with 
its maturity is by no means uncommon even at the present 
moment; and the warning cannot be given too soon, nor 
Doctrine of re P ea ^ed too often, that it is only by a careful study of the 
evolution gradual development of legal conceptions, that we can 
in law. guard ourselves against mistakes into which we should 
otherwise be almost sure to be betrayed. In common with 
the class to which they belong, the delusions of which I 
speak, point to modes of thought from which we cannot 
emancipate ourselves without a conscious effort of the 
mind. We find it difficult to realize the intellectual con- 
dition of society in its infancy, and are frequently betrayed 
into transferring to ancient law, conceptions which find a 
place in some of the latest improvements in jurisprudence. 
The Hindu The history of the Hindu Will furnishes us with a case in 
Wlll< point. I do not mean to deny that testamentary succes- 
sion was known to the Hindu law ; but there can, I think, 
be no reasonable doubt that we owe the first recognition of 
the institution by English lawyers to the supposed analogy 
between a gift and a bequest. The analogy may be very 
close or it may be merely fanciful. This is not the place 
to discuss the question, but I may be permitted to observe 
that an examination of ai'chaic institutions shows, beyond 
the shadow of a doubt, that testamentary succession belongs 
to a range of ideas, very much in advance of that which 
permits the owner to make a gift of his property during 
his life ; and that in no system whatever, has the law of wills 
grown out of, although it may have sometimes shaped itself 
on the model of, the law regulating gifts during life. 

I trust I have said enough to make it unnecessary for 
me to insist on the interest which attaches to the early 
history of those legal conceptions which we now see only in 
their maturity. We may not in every case be able to trace 
the outlines distinctly ; but the assertion may be hazarded 
without rashness, that there is not a single juridical concep- 
tion which may not be historically examined with advan- 
tage. A few words therefore on the origin and growth of 
the law of securities, the immediate subject of the present 
lectures, will not, I trust, be thrown away. 



EARLY NOTIONS OF PLEDGE, 3 

A learned writer on the law of mortgage lias said that LECTDBE 
pledges must have come into use as soon as the rights of 
property were recognized. This assertion, however, must 
be received with considerable reserve. It is true that E ar]y no _ 
pledges were known to earl} 7 law, but the conception when tions of 
it first shows itself, is marked by the crudity peculiar to securit y- 
the infancy of law ; and, the nearest approach to it, is to 
be found in the early law of distress, which fills such a 
large space in all ancient systems of law. 

The writings of Sir Henry Maine have made us familiar Early law 
with the important part played by the law of distress of dlstress - 
in primitive society, an extra-judicial remedy which 
gradually replaced the barbarous custom of reprisals. 
A probable legacy from early Aryan usages, it seems at 
one time to have been the almost universal method of 
enforcing satisfaction for all claims, and was not confined, 
as in some modern systems, principally to the demands of 
the landlord on his tenant. But, as Sir HeDry Maine 
points out, this extra-judicial remedy, when it is first 
revealed to us, is both inadequate and incomplete. The 
distrainer could only extort satisfaction by retaining 
the property in his custody, and thus forcing his adver- 
sary, so to speak, to come to terms. He could not sell 
the property and thus satisfy his claim, nor was the distress 
forfeited to him in satisfaction of his demand. The dis- 
trainer acquires this right, but only very gradually in the 
maturity of jurisprudence, and we find that, even in so pro- 
gressive a country as England, the power of sale was engraft- 
ed on the old common law, only towards the end of the 
seventeenth century. (Maine's Early History of Institu- 
tions, Lecture X ; Smith's Landlord and Tenant, p. 263.) 

I have called your attention to the law of distraint, 
as described in the pages of Sir Henry Maine, because you 
will find a remarkable similarity between it and the law 
of pledge, as well in their earlier features as in their later 
developments, the evolution, if I may say so, having pro- 
ceeded on almost parallel lines. 

Let me pause here for a moment to explain that, accord- 
ing to modern notions, the very essence of a security is the 
right of the creditor to obtain satisfaction, wholly irrespec- 
tive of the ability or willingness of the debtor. If the 
debtor makes default, the creditor may either sell the pro- 
perty and repay himself out of the purchase-money, or the 
pledge is forfeited to him in satisfaction of his demand. 



4 LAW OF MORTGAGE. 

LECTURE The debtor may be obstinate or unable to pay, but the 
creditor can always obtain satisfaction out of the property 
pledged to him, and is, therefore, wholly independent of 
the debtor. It is, however, only in the maturity of juris- 
prudence that the pledgee acquires this right ; a right 
which is justly regarded as the very perfection of a secu- 
Mortgage rity. In the infancy of law, a pledge was only regarded 
in early as a me ans of compelling satisfaction. The creditor, by 
detaining the pledge, might compel the debtor to fulfil his 
engagement ; but, beyond the pressure which the pledgee 
was thus in a position to put on the pledger, the creditor 
could not turn his security to account. In other words, a 
pledge only operated on the will of the debtor. The cre- 
ditor had no authority to sell the pledge, nor was it forfeit- 
ed to him in discharge of his demand. 

Modern law furnishes us with an instance of a right 
closely resembling the right of the pledgee in ancient law. 
English lawyers have frequently pointed out the unsatis- 
Possessory factory character of what is called a " possessory lien " in 
lien. English law, a bare right of detention, unaccompanied by 
any power of sale or foreclosure. It is no doubt an ano- 
malous right; and the true explanation of the anomaly 
lies in the fact that it is a mere survival. We have 
here an instance, by no means exceptional, in which a 
conception, distinctly archaic, is found to linger in a system 
which has shown no mean capacity for expansion with the 
multiplying wants of an active commercial age. 

I have said that in ancient law a pledge was regarded 

simply as a means of extorting satisfaction, and that the 

Powers oi powers of sale and foreclosure with which we are so 

sale and familiar at the present day, are improvements which are 

foreclosure. i r i j TIH 

only tound in mature jurisprudence. I shall now ask you 
to test the soundness of the conclusion by an examination 
of a system of law, which, while it has powerful! }> affected 
in its maturity the institutions of the greater part of the 
civilized world, is, perhaps, also the only system which 
possesses a continuous history of this branch of jurispru- 
dence. I allude to Roman law, a system which must 
always possess peculiar attractions for the student of com- 
parative jurisprudence ; for there you may see legal con- 
ceptions in the rough as well as in their highest finish, the 
whole process of evolution unfolding itself as it were 
before our very eyes, by slow and almost imperceptible gra- 
dation. " In the history of legal conceptions," as observed 



REAL SECURITY. 

by Dr. Hunter, " the Roman law occupies a position 
unique value. It forms a connecting link between the 
institutions of our Aryan forefathers and the complex 
organization of modern society. Its ancient records carry 
us back to the dawn of civil jurisdiction, and, as we trace 
its course for more than a thousand years, there is exhibit- 
ed a panorama of legal development such as cannot be 
matched in the history of the laws of any other people." 
(Hunter's Introduction to Roman Law, page 1.) 

The evidence furnished by Hindu and Mahommedan law 
is less authentic, and has to be approached with greater 
caution. I hope, however, to be able to show in the next 
lecture, that there are passages, as well in our own law as 
in the Mahommedan law, which fortify, in a remarkable 
manner, the conclusions suggested by an historical examin- 
ation of the Roman system ; passages which can only be 
explained on the hypothesis that a real security, a security 
which makes the creditor wholly independent of the 
debtor, finds its place in every system among the latest 
improvements in jurisprudence. For the present, I shall 
confine myself to the Roman law. 

I have not paused to explain with sufficient clearness 
the meaning of the words " real security," an expression 
which I have already used more than once. A real security *? eal secu - 
is a security in which the creditor possesses the right to^iSdn- * 
satisfy his demand out of the property pledged to him, g 
and must be carefully distinguished from a real right, 
which, as I shall have occasion to explain more fully 
hereafter, is simply a right availing against the world 
at large, and not merely against a determinate person or 
persons. A creditor may have a real right in property 
belonging to his debtor, and yet he may not possess a real 
security. Thus, if any body should take out of my pos- 
session property on which I have a bare lien, I have a 
right to have the property brought back into my posses- 
sion, but I have no right, the security not being real, to 
sell the property in satisfaction of my demand. The 
distinction is a very important one, and must be carefully 
borne in mind in the discussions in which we shall pre- 
sently be engaged. 

Let us now turn to the Roman law for the purpose of Roman law 
ascertaining the successive steps by which the law of secur- . f securi - 
ities was gradually developed. The subject has already 
been investigated by a living German jurist, and the results 



LAW OF MO11TGAGI5. 



LECTURE 
I. 



FiJucia. 



Pignus. 



Pra-torinn 
law. 



Improve- 
mcntsintlic 
Roman law 
of pledge. 



of his labours have been made accessible to English readers 
by Dr. Markby in his Elements of Law. (See Chapter XI.) 

The earliest form of security known to the Romans 
appears to have been the Fiducia. This was a proceeding 
by which the debtor transferred to the creditor the owner- 
ship of the property which was intended to be given as a 
security; the creditor on his part agreeing to restore it to 
the debtor as soon as the obligation was fulfilled. If the 
debtor, however, made default, his right to the property 
was not extinguished. To use the language of modern 
law, the debtor possessed an equity of redemption, of 
which the creditor could not deprive him, either by sale 
or foreclosure (a). I shall pass over, for the present, the 
successive steps by which the Fiducia ultimately ripened 
into a real security, and proceed to discuss another mode 
of giving security; which, although a later invention, was 
ultimately destined to replace the Fiducia in the juris- 
prudence of Rome. 

This was the Pignus which, in its earliest form, was 
a proceeding by which the debtor transferred, not the 
ownership, as in the Fiducia, but the bare possession, to 
his creditor. The pledgee only possessed the right of 
detention. Even this right, however, was at first extremely 
precarious. It was not protected by a real action, as the 
law refused to recognise a real right in the creditor. So 
long as this was the case, land was rarely given in pledge, 
as the creditor had no remedy if the debtor made a fraud- 
ulent alienation. This was, no doubt, a very unsatis- 
factory state of things. The law, however, was insensibly 
developed by the Praetorian jurisdiction, to which Roman 
jurisprudence is indebted for so many reforms. Under the 
semblance of moulding the procedure of the Courts over 
which they were called upon to preside, the Roman Praetors, 
by promising to grant a particular action or plea, re- 
modelled almost every branch of the law, and owing to 
circumstances to which I shall presently refer, the law of 
security seems to have claimed their attention at an early 
period. The first improvement was effected by a Praetor 
named Salvius, who allowed the validity of a pledge, 
although not followed by a transfer of possession, in the 

() I am bound to state that a somewhat different view has been 
taken by Dr. Hunter in his Roman Law, but as the Fiducia never occupied 
an important place in Eoman law, and as it shortly fell into disuse, 
s not necessary to discuss its precise incidents. 



IMPROVEMENTS IN THE ROMAN LA.W OF SECURITY. 7 

case of a tenant pledging his farming stock as security LECTURE 
for the rent payable by him. This improvement was 
followed by the ' actio serviana,' which allowed the land- 
lord to enforce his claim by a real action, unfettered by the Act ; 
somewhat inconvenient limitations by which the Praetor serviana, 
Salvius had sought to fence in the right of the landlord to 
follow the pledge in the hands of third persons. Origin- 
ally confined to the security of the landlord on the farm- 
ing stock of the tenant, the right was extended in course of 
time to all classes of pledges, whatever might be the nature 
of the property, and whether the pledge was or was not 
accompanied by possession. The last improvement was Quasi-ser- 
accomplished by the ' quasi - Servian action,' which marks viau action, 
an important epoch in the history of the Roman law of 
securities. The jealousy with which archaic law guards 
the creation of all real rights, has now been relaxed. A 
mortgage may thus be created without delivery of posses- 
sion, and the " substantial pledge has been refined into 
the invisible rights of a hypotheca." 

I have said that there were influences at work from 
without, which, while they hastened the development of 
this branch of the Roman law, also determined, in a great 
measure, the direction of that development. 

" The most important improvements in the Roman law of External 
security," says Dr. Markby, " were not introduced until, by jS lces 
the extension of the Roman dominion beyond the confines modified 
of Italy, very large estates first became common. From[^ Komaa 
this time large numbers of slaves, and even of free persons, 
began to be employed in cultivating these properties. Small 
estates also were sometimes let out to farm. Hence the 
necessity that the landlord should have some security for 
his rent became apparent at Rome, as it has in all places 
where the land of one person is cultivated by another. 

" Under the old law it was not easy for the landlord to 
'obtain this security from the cultivator. Generally the 
only property which the cultivator had, was his farming stock 
(invecta et illata) ; and it was obvious that this could 
neither be assigned to the landlord by a fiducia, nor given 
into his custody by a pignus. It was, therefore, necessary 
to devise some other means of effecting security ; and the 
mode adopted was, to allow the tenant by a simple agree- 
ment, without any formalities, to pledge his farming stock 
to his landlord as a security for the rent." (Elements of 
Law, 443, 444.) 



8 LAW OF MORTGAGE. 

LECTURE I shall now proceed to state the successive steps by 
which the creditor gained a real security, which, as I have 
already explained, is very different from a real right. 
Growth of This was originally accomplished by the introduction of a 
a real secu- clause expressly authorizing a sale upon default, a clause 
which appears to have been suggested by a right possessed 
by the State of selling land pledged to it. At a somewhat 
later period, this right was presumed to exist in every 
pledge in the absence of anything to indicate a contrary 
intention. The creditor thus acquired the right to realize 
his money by the sale of the pledge ; in other words, the 
creditor acquired a real security. The power of sale 
Power of now came to be regarded as a right inherent in the 
sale. pledgee, or, as a Roman lawyer would, perhaps, have said, 

one of the natural incidents of a pledge ; and, it was pro- 
bably under the influence of this dominant idea, that the 
law, at a later period, permitted a sale, even when the 
creditor had expressly agreed not to exercise the power. 

We have now reached the stage in which the law 
stood in the maturity of Roman jurisprudence. The bare 
right of detention originally possessed by the creditor, has 
now been succeeded by a right of sale, which, as we have 
seen, could not be controlled even by the express agree- 
ment of the parties ; while the somewhat cumbrous forma- 
lities which were originally necessary to the validity of the 
Pignus (including the transfer of possession) have been 
replaced by a simple agreement of the parties. 

In giving an account of the Roman law of security, I 

did not notice, at the proper place, the improvements which 

took place in the Fiducia. The gradual progress of the 

the S Fiducia f Fiducia, from a bare right to compel the debtor to make 

'satisfaction, to its latest improvements, when it ripened 

into something like the mortgage of the English law, or 

our own conditional sale, is not less interesting than the 

development of the kind of securities which I have been 

hitherto considering. 

The first improvement was the introduction of a clause, 
the lex commissoria,by which it was agreed that the creditor 
should become, on default, the absolute owner of the pro- 
perty pledged to him. Such a covenant, however, if liter- 
ally enforced, was likely to operate in many cases with 
considerable hardship upon the debtor ; and the stringency 
of the condition was relaxed by subsequent legislation. 
The default of the debtor was not immediately followed 



coimnis- 



CLASSIFICATION OF SECURITIES IN ROMAN LAW. 9 

by forfeiture, and he was permitted to redeem, if he ful- LECTUBE 
filled his obligation, withiu a reasonable time. The posi- 
tion of the creditor now became analogous to that of an 
English mortgagee, and the conflicting rights of the pledg- 
er and pledgee were, in some measure, reconciled with 
justice and equity. Roman lawyers, however, could not 
bring themselves to accept as final such an imperfect recon- 
ciliation. It offended their sense of " elegance." A pledge, 
whatever might be the language used by the parties, was 
only a security for the debt, and the creditor was not in 
fairness entitled to anything more. In later Roman law, Foreclo- 
therefore, the creditor was not suffered to foreclose, but sure in R - 
could realize his dues only by the sale of the property m 
pledged to him. You will presently see that the English 
law is also slowly drifting towards the same point. The 
power of directing a sale instead of a foreclosure, which 
used to be exercised so very sparingly by the English 
Courts of Equity, has been extended by a recent statute, 
while other indications are also not wanting, that the total 
abolition of foreclosure is only a question of time. 

From what I have said, I think it is clear that a real 
security is the most perfect security. The history of the 
Roman law shows that it was only very slowly that the 
right of detainer, the only security recognised in early 
times, ripened into a real security. An examination of 
Hindu and Mahommedan law also suggests the conclusion 
that a security in the infancy of law only operated upon the 
will of the debtor. I shall, however,as I have already stated, 
discuss this point in the next lecture, when I propose to 
give a general outline of the law of security as it is to be 
found in Hindu and Mahommedan legal treatises. 

I shall conclude this part of my lecture with a few Threefold 
general observations on the Roman law of security, and I div i si .o of 
propose, in the first place, to call your attention to the by Roman 
threefold division of securities by Roman lawyers a la wyers. 
division which, although not, perhaps, strictly logical, is 
eminently convenient for our purpose (6). 

Roman law divides securities or mortgages into three 
classes, conventional or consensual, legal, and judicial. 
A conventional mortgage is one created by the agreement, c 
express or implied, of the parties, and calls for no remark, ttaud 
A legal mortgage is, as the name imports, one which is mort gage. 

(&) See note A at the end of this lecture. 



LECTURE 
L 



Legal 
mortgage. 

Judicial 
lien - 



Rights of 



LAW OF MORTGAGE. 

created merely by the operation of law. A legal ruort- 
o-ao-e, however, must not be confounded with implied conven- 
tio'nal mortgages, which are really based upon the voluntary 
consent of the parties, the distinction between the two 
^ e j n g precisely the same as that between implied contracts 
and O quasi-contracts. The judicial lien of the civil law, 
is a lien created by an order of a Court of Justice, for the 
purpose of compelling obedience to its orders, and corre- 
sponds to the process of attachment under the procedure 
of our Indian Courts. I do not propose to discuss at length 
the various rules which governed each of these classes of 
securities, as this is not the place for such discussion. 
Much of our own law of mortgage is, however, still in an 
uncertain, if not in a fluid, condition, and I shall, therefore, 
be obliged to refer occasionally to the Roman law which, 
although not possessed of any inherent binding author! ty, 
has always proved an almost inexhaustible store-house 
of legal principles, and may be usefully consulted in 
all doubtful cases arising in our Courts. A few general ob- 
servations, therefore, will, I trust, assist you in following me 
through some of the discussions in which I shall be engaged 
in the course of these lectures. 

The pledgee possessed in later Roman law, as we have 
already seen, a right to sell the pledge, a right which 
. migl't be exercised by him, even if he had engaged with 
the debtor not to sell the pledge in satisfaction of his 
demand. But the creditor was not at liberty to sell, 
until his claim was fully due and payable ; and even then 
he was bound to give the debtor notice of his intention to 
sell. If, however, the creditor had expressly engaged not 
to exercise the right of sale, he was bound to issue three 
successive notices, instead of the one which was ordinarily 
required by the law. The pledgee was not bound to 
invoke the process of the Court for the sale of the pledge ; 
but the sale, in the absence of any express agreement to 
the contrary, must have been effected publicly, and the 
debtor summoned to be present. In later Roman la\v, the 
exercise of the power of sale was hemmed in by further 
provisions for the protection of the debtor. If the parties 
agreed as to the manner, time, and other conditions of the 
sale, the creditor was bound to act in accordance with the 
terms of the agreement; but, where the contract was silent 
on the point, the mortgagee, if in possession, was bound to 
give formal notice of his intention to exercise his power of 



EIGHTS OF PLEDGOR AND PLEDGEE. 11 

sale to the debtor ; if he happened to be out of possession, he LECTURE 

was bound to obtain a judicial decree, and, after the lapse of '__ 

two years from either of these events, the mortgagee was en- 
titled to sell the property. (Hunter's Roman Law, p. 437.) But 
the creditor was not entitled to anything in excess of the 
amount of his debt with interest, if any, and costs. If there 
was any overplus, the debtor was entitled to it ; who, on 
the other hand, was riot released from liability if the 
proceeds fell short of the demand of the creditor. The 
creditor, however, could not be compelled to sell, unless the 
debtor gave security for the payment of the debt in full ; 
but a fraudulent sale rendered the creditor personally liable 
to the debtor, and if recourse against the creditor was 
impossible, the purchaser might be compelled to make 
restitution. If no bidder offered a reasonable price, the 
creditor might himself obtain an assignment of the pledge 
for a fair price ; such an assignment, however, did not 
absolutely extinguish the debtor's right of redemption. 

The debtor, before the exercise of the right of sale by 
the creditor, was not restrained from dealing with the 
property in any way he thought proper, provided that 
the security of the creditor was not thereby impaired. 
The pledgee could not be affected by any disposition 
which the pledger might make of the property pledged Sale by 
by him. The right of the pledgee was a real right, and 
could not be prejudiced by any alienation made by the 
debtor. A sale by the creditor, therefore, passed the pro- 
perty to the purchaser, free of all incumbrances subse- 
quently created by the debtor. 

It would appear, although the point is not quite 
free from doubt, that the right of sale could be exercised 
only by the first pledgee, and not by the second or any sub- 
sequent incumbrancer. It was, however, always open to 
the puisne pledgee to redeem the prior mortgagee, and thus 
acquire the rights of the latter. This right of redemption R 'g ht of 
was not confined to the second mortgagee, and any mort- tfon!"' 
gage creditor might place himself in the situation of the 
first mortgagee by the payment or deposit of the amount 
of his demand, but the privilege could not be claimed by 
an unsecured creditor. The principle of the English law, 
however, by which a preference may, in certain cases, be 
gained over an intermediate incumbrance, was not recog- 
nized by Roman lawyers, although the mortgagor himself Tacking in 
was not permitted to redeem without paying to the Komanlrnr - 



12 LAW OF MORTGAGE. 

LECTUBE mortgagee all the debts, whether secured or unsecured, 
which might be due to him from the mortgagor, but the 
right could not be asserted against a subsequent incuin- 
brancer. 

Priority The priority of mortgages was, as a rule, determined by 
determined ^ ne or( j e r of time, and it seems that delivery of possession 
conferred no advantage. (But see Colquhoun's Civil Law, 
1475.) It is, however, necessary to remember that, the 
time by which priority was regulated, was not the date on 
which the money for which the security was given was 
actually borrowed, but that on which the contract of mortgage 
was entered into. If, therefore, the mortgage was created 
subject to any condition, it would, on the fulfilment of that 
condition, relate back to the date when the mortgage 
was granted, but there was a distinction between what 
Potestative Roman lawyers called a casual and a potestative condi- 
potes'ta'tYve tion. Thus, suppose A hired a bath from B from the next 
conditions, kalends, and agreed that his slave C should be security for the 
rent, but before the kalends A borrowed money from D, 
and hypothecated C to him. In this case, B would have 
priority over D, although there was nothing actually due for 
rent at the time D made his advance, the reason assigned 
for the preference being, that the Ii3 ? pothec was attached 
to the contract of hire in such a manner, that without 
the consent of B it could not be got rid of. B would, 
therefore, have the first hypothec. (Hunter's Roman Law, 
p. 441.) But the case which I have just put, must be dis- 
tinguished from the class of cases in which the agreement, 
although prior in date, was, to borrow the language of 
Roman law, only potestative, that is, did not create 
binding obligation either to lend or to borrow. Thus, 
suppose A agrees with B to lend him money by a certain 
day, the farm of B to stand as security, but before any 
money has been advanced by A, suppose B borrows from 
C and hypothecates the same farm ; if A should, afterwards, 
advance money under the agreement to B, he would not, 
it seems, be entitled to priority over C. (Hunter's Roman 
Law, p. 441. See also the authorities collected in Surge's 
Foreign and Colonial Law, Vol. III,p. 180.) The distinction 
between the two cases is, as I have already suggested, that 
in the one an obligation is created in presenti, although it 
is to come into force at a future date, while, in the other 
case, there is no obligation imposed on the one party or on 
the other, either to leud or to borrow the promised money. 



PRIORITY OF MORTGAGES. 13 

There were, however, exceptions to the rule of priority LECTURE 
founded either on grounds of public policy or on equitable 
considerations, and these exceptions were known in Roman 
law as privileged liens. They are thus classified by Dr. 



Hunter in his treatise on Roman law : of priority. 

(1) The Imperial Exchequer (Fiscus) which came before 
all creditoi's for arrears of fines. 

(2) A creditor advancing money to buy office (militia) 
expressly on the condition of obtaining priority. 

(3) A married woman suing for the recovery of her dos, 
but not in respect of the donatio ante nuptias. 

(4) A person advancing money on the security of any 
house or property for the purpose of preserving it from 
destruction. (Hunter's Roman Law, p. 442.) 

Other privileged hypothecs ranked according to their Salvage 
priority in time, but an exception was recognized for lien9 ' 
obvious reasons in favour of salvage liens in which priority 
was regulated in the inverse order, the later being prefer- 
red to the earlier. 

It is important to observe the change introduced into 
the later Roman law by which a hypothec made by a 
public deed, that is, sealed in the presence of witnesses and 
prepared by a notary (tabellio), had priority over hypo- 
thecs attested only by private documents. Leo gave the 
same privilege to a private writing signed by three good 
and respectable witnesses, and Justinian continued and 
confirmed the privilege. (Hunter's Roman Law, p. 442.) 

I may mention that the pledgee was entitled in the Privileged 
Roman law to a lien for any advances made by him for the 
purpose of preserving the pledge. All such advances were 
regardedas privileged debts, and in cases of disputed priority, 
took effect accordingly, and not simply from the date when 
the expenses were actually incurred. A privileged lien was 
also recognized in favour of a person whose money had been 
laid out in the improvement of an estate, but there was a 
difference between the position of such a person and that of 
a creditor by whom the property itself had been preserved. 
In the latter case the lien attached to the thing itself, 
while in the former case the preference was limited to 
the improvements, and did not extend to the estate itself. 
(Domat's Civil Law, 1742.) 

The Roman law abounds in instances of tacit or legal Tacit 
hypothecation, and it may be said without exaggeration ^n^nRo- 
that the pages of the Digest as well as the writings of man law. 



14, LAW OF MORTGAGE. 

LECTURE civilians bristle with liens created merely by operation of 
law. The hypothec of pupils over property bought by 
their tutors with their money, the hypothec of a person 
making a loan for the purchase of a house, are only some 
of the numerous instances which might be cited in illus- 
tration of the readiness with which Roman lawj^ers allowed 
a lien to be annexed to a great variety of transactions. It 
is, however, unnecessary to notice them in detail in this 
place, as they owed their existence mainly to artificial causes, 
and, however well adapted to the requirements of the com- 
munity in which they grew up, cannot be held up as pat- 
terns for close imitation in the jurisprudence of communities 
cast in a different mould, and governed by institutions of a 
different type. In every body of law, care must be taken 
to distinguish those portions of it which rest upon natural 
equity, reflected in the dry light of reason, from those 
which have grown out of mere accidental conditions, and 
which always take their colour and shape from their 
environments. It is, surely, possible to admire a system 
without acknowledging that every part of it is adapted to 
the requirements of all ages and countries. Our admira- 
tion, however well-founded, should not be allowed to betray 
us into confounding the general with the special, the essen- 
tial with the accidental. This caution is, perhaps, no- 
where more necessary than in India, where its neglect has 
led to the introduction of much law of very doubtful equity 
but of most undoubted subtlety, the only apology for which, 
I am afraid, is to be found in the ' fluidity ' of our law, and 
I may perhaps add without disrespect, the facility with 
which the work of consolidation can be effected. 
Hypothe A hypothecation came to an end by payment or tender 
cation how followed by consignation or deposit of the mortgage 
debt, together with interest and such expenses as the 
mortgagor was bound to pay. It was also destroyed by a 
release by the creditor which might be either express, or 
implied from his conduct, as, for instance, by his agreeing 
to take a different security. But a novation, by which term 
the transaction was known to the Roman law, did not 
extinguish the original mortgage if it was renewed at the 
time of the substitution, but such mortgage took effect only 
according to the extent of the original lien and did not 
attach to any further sum in which the debtor might 
subsequently become indebted to the mortgagee. (Surge's 
Foreign and Colonial Law, Vol. Ill, p. 215, and p. 237. 



MARSHALLING IN ROMAN LAW. 15 

See also Colquhoun's Roman Law, 1475.) I may also LECTURE 
mention that a creditor who had got a tacit mortgage, did 
not release or discharge it by taking a conventional secu- 
rity, nor did he surrender his priority in any way by 
accepting such a mortgage. (Burge's Foreign and Colonial 
Law, Vol. Ill, p. 242.) 

The pledge might also be extinguished by merger which Extinction 
occurred when the rights of the pledger and of the pledgee by mer er< 
became vested in the same person, but no merger took place 
where the operation of the rule would work any injustice. 
If it was indifferent to the person, in whom the union of 
interest arose, whether the charge was kept alive or 
extinguished, a merger might be presumed in the absence of 
anything to repel such inference, but there was no merger 
where any beneficial purpose could be answered by keeping 
the mortgage alive. I need scarcely point out, that the right 
of the pledgee was liable to be extinguished by the law of 
prescription, and that, of course, the security could not be 
enforced if the pledge was destroyed, although where the 
destruction was accidental, the right of the creditor to 
recover payment was not in any way affected by the loss. 
But nothing falling short of destruction could put an end 
to the pledge, and if the subject of the pledge only suffered 
a change, the pledgee could enforce his rights against it 
notwithstanding such alteration. 

It is instructive to observe that the doctrine known as Marshall- 
marshalling in the English Court of Chancery, was recog- s Ko ~ 
nized, to a certain extent, in the later Roman law, and a 
third person in possession of the mortgaged property might, 
under certain conditions, insist upon the creditor proceed- 
ing in the first instance against the debtor and his sureties, 
hut no such indulgence could be claimed by the person in 
possession, if he knew, at the time he acquired the mortgag- 
ed premises, that they were subject to the mortgage, or if he 
acquired them after a suit had been instituted against the 
mortgagor on the mortgage security. (Burge's Foreign 
and Colonial Law, Vol. Ill, p. 221.) 

It appears that if a person who was not the owner of a Effectof the 
property mortgaged it, and afterwards happened to become mortgagor 
the owner, the property so acquired would be subject to the theowuer. 
mortgage created by him, and it seems, although the point 
is not free from doubt, that the mortgage related back to 
the date of the original contract and would be preferred to 
a subsequent mortgage granted after the acquisition of the 



16 LAW OF MORTGAGE. 

LECTURE dominium by the mortgagor. (See the authorities for and 
against this proposition, collected in Burge's Foreign and 
Colonial Law, Vol. Ill, pp. 173-174.) 

The right of substitution or subrogation formed an 
fu'brogi- important branch of the Roman law of mortgage, and was 
tion in Ro- re cognized in it to an extent to which it has not been 
aw ' carried in most modern systems. A subrogation in the 
Roman law might be either conventional, that is, consensual, 
or it might take place by mere operation of law. A subse- 
quent mortgagee, who paid off a prior mortgagee, was 
entitled as of right to stand in the place of the 
latter, and this is an instance of subrogation by opera- 
tion of law, while an instance of conventional subrogation 
is furnished by the ordinary case of an assignment of 
his security by the mortgagee. A creditor who lent money 
How ac- to tne debtor for the purpose of paying off a mortgage, on the 
quired. condition that he was to be substituted in the place of the 
mortgagee, was also entitled, under certain circumstances, to 
the benefit of the mortgage. (Domat's Civil Law, 1774.) The 
right of substitution might also, in some cases, be acquired 
by an order of Court, made with the consent of the debtor, or, 
even sometimes without such consent. A similar right was 
allowed in favour of a person to whom a mortgage debt was 
sold under a decree of a Court of Justice. The right of sub- 
rogation was not, however, necessarily dependent, either 
on the order of a Court of Justice, or, as you have just heard, 
on the consent of the parties. A subsequent pledgee, for 
instance, by paying off a prior mortgagee, could, as I told 
you, claim to stand in the place of the latter, and so also 
could a purchaser who had paid off a mortgage on the 
property purchased by him. (Domat's Civil Law, 1777.) 
Again, if the purchase-money was applied by the vendee 
in payment of a prior mortgage, he could always insist 
upon standing in the place of the mortgagee, and might 
use the mortgage as a shield against the claims of all 
intermediate incumbrancers. (Domat's Civil Law, 1785.) 
A surety also, who discharged the debt of his principal, 
was entitled to the benefit of any securities which might 
be held by the creditor against the principal debtor. 
Extinction It appears that the pledge ceased to exist, if the debtor 
of pledge. h a r)p ene <l to lose his right to the pledge, as if, for example, 
lie was evicted by a title paramount, but the rule was care- 
fully guarded so as to protect the mortgagee from the fraud 
or laches of his mortgagor. Thus, if the mortgagor having 



SUBJliCTS OF MOHTQAGE. 17 

a good defence neglected to defend an action against him, LECTURE 

or if he abandoned his right, the rights of the mortgagee '_ 

were not affected in any way. (Domat's Civil Law, 1798.) 
It is superfluous to state, that if the termination of his 
estate or interest depended on the mortgagee himself, as 
if he had purchased a property, with an option to rescind 
the sale, he could not exercise this liberty after having 
mortgaged it to a third person. (Burge's Foreign and 
Colonial Law, Vol. Ill, p. 241.) 

Everything which might be sold, could be lawfully mort- 
gaged in the Roman law. But property which could not be 
the subject of alienation, could not be the subject of mort- g u j,j ects O f 
gage. A mortgage might be either general, that is, it mortgage, 
might include the whole of the property which the debtor 
possessed at the time of the mortgage, or which he might 
subsequently acquire ; or it might be special, that is, con- 
fined to some specific property. The debtor might pawn 
corporeal or incorporeal things, but not the necessary 
wearing apparel of himself or of his family, or the imple- 
ments of trade or agriculture. Then again things which were 
extra-commercium could not, of course, be the subject of 
mortgage. A security, moreover, might be given, not only 
for the repayment of a debt, but also for other consider- 
ations. It might, for instance, be granted by the vendor of 
a property to the purchaser to indemnify him in case he 
should be evicted. The creditor might be put in posses- 
sion of the property pledged to him, in order that he might 
satisfy himself out of the rents and profits. Such an 
agreement, however, was not permitted to be made the 
means of obtaining usurious interest. If the mortgagee 
was in possession, his receipts were set off against the Anticbre- 
debt, but there was a well-known form of mortgage known S1S> 
by the name of Antichresis in which the mortgagee could 
retain the profits in lieu of interest. 

The pledgee was liable in the Roman law to take the same Liabilities 
care of the pledge as a prudent father of a family would of p| e j h g e 
his own property, but if the pledge perished accidentally in 
his hands, the mortgagee incurred no liability, and he might, 
in such case, either demand another security, or recover the 
debt immediately from the pledger. The debtor, again, on Liabilities 
his part, was bound to pay the creditor any expenses f tlie 
necessarily incurred by him for the preservation of the 
mortgaged property, as, for instance, for repairing a house, 
but there seems to have been some doubt as to the right of 

E. B. G., M. 2 



18 

LECTURE 
I. 



Pledge 
when 
redeem- 
able. 



Pledge in 
systems 
founded 
on Roman 
law. 



Exception 



LAW OF MORTGAGE. 

the pledgee to reimbursement for expenses which, although 
not necessary, were beneficial to the mortgaged property 
a doubt which, as we shall see in a subsequent lecture, 
lingers even at the present moment in the English law, 
and which certain recent decisions have by no means served 
to dispel. 

Before dismissing the subject of Roman law, I will 
mention one or two other points which also deserve the 
attention of the student. A purchase of the mortgaged 
property by a subsequent mortgagee, although made 
under a sale by the first mortgagee, did not pass to the 
purchaser an irredeemable title, and the same was the 
case with the surety. Indeed, it would seem, that in all 
cases where the purchaser was not an absolute stranger, the 
debtor might exercise his right to redeem the property 
a privilege which has, however, been curtailed in most 
modern systems of law. (Burge's Foreign and Colonial 
Law, Vol. Ill, pp. 226-227.) 

Another peculiarity, connected with the Roman law, was 
the right, which the mortgagee had, to interrupt the posses- 
sion and prevent a trespasser from acquiring an absolute 
title to the property, by means of an action against the 
person in possession which might be brought even before the 
mortgage-debt fell due a provision the absence of which 
from our law occasionally causes much embarrassment to 
the mortgagee. (Burge's Foreign and Colonial Law, 
Vol. Ill, p. 232.) 

I have dwelt on the Roman law perhaps longer than 
I should have done, but the importance of the subject is, I 
trust, sufficient to excuse me for having detained you with a 
brief outline of one of the most interesting systems of law. 

The short account which I have given you of the Roman 
law, will also serve as a rough sketch of the law followed 
in our day in countries whose jurisprudence is founded on 
the civil law, and which constitute not only the greater part 
of Europe, including Scotland, but also a not inconsiderable 
portion of the new world. There is, however, one important 
deviation which deserves notice, the creditor not being per- 
mitted by most continental systems to exercise the power 
of sale except through judicial process. Another departure 
from the civil law may also be noticed in this place, the 
hypothecation of moveables, although sanctioned by Roman 
lawyers, not being, as a rule, allowed in any of the modern 
systems which are professedly founded on the civil law. 



ENGLISH LAW OF MORTGAGE. 19 

(Surge's Foreign and Colonial Law, Vol. Ill, p. 201 ; LECTURE 
Code Napoleon, 2119.) L 

There is one other system of law which has a very close English 
interest for the Indian student; and a few words on the lawo r f (r 
English law of mortgages will not, I trust, be wholly out m 
of place. An English mortgage resembles in its features, 
as I have already had occasion to remark, the Fiducia of 
the later Roman law. In form it is a conveyance of land 
by the debtor to his creditor, with a proviso that, on 
repayment of the debt on a certain day, the conveyance 
shall be void, or, as is now more usually the case, that the 
creditor shall reconvey the estate to the debtor. If the 
money is not repaid on the appointed day, the mortgagee 
becomes at law the absolute owner of the property, but 
the Court of Chancery, which has almost exclusive juris- 
diction over mortgages of land, regards the transaction only 
as a security for the repayment of the debt, and allows the 
mortgagor to redeem on payment of the principal, interest, 
and costs within a reasonable time, which has been reduced 
by a recent statute to twelve years from the date of the 
entry of the mortgagee, or of an acknowledgment by him Equity of 
of the title of the mortgagor. This right to redeem is known redemp- 
as the " equity of redemption," and, as I shall have occasion tlon ' 
to explain hereafter, is guarded with peculiar jealousy by 
the Court of Chancery. But we must remember that the 
equity of redemption is not, as the name perhaps would 
suggest, a mere right. It is an "estate" in the land, and 
may be devised, granted, or otherwise alienated by the 
mortgagor, subject, however, to the right of the mortgagee 
to foreclose, when, under the decree of foreclosure, the 
estate passes to the mortgagee free of all iucumbrances 
created subsequently to the mortgage. 

At any time after the estate has been forfeited at 
law, the mortgagee has the right to call upon the 
mortgagor either to redeem, or, in default, to be for ever 
foreclosed from redeeming the property. This is accom- Bi u of 
plished by a bill of foreclosure, by which the mortgagee foreclosure, 
prays that an account may be taken of what is due to him 
on his securitjr ; and that the mortgagor may be decreed 
either to pay the amount, by a short day to be appointed 
by the Court, or to be foreclosed his equity of redemption. 
An account is taken, and a day for payment is appointed; 
the mortgagor being generally allowed for that purpose 
six mouths from the date of the certificate determining 



20 LAW OF MORTGAGE. 

LECTURE the amount due to the mortgagee on his security. If the 
mortgagor makes default, the mortgagee obtains an absolute 
order for foreclosing, and the estate passes from the mort- 
gagor to the mortgagee. A decree of dismissal of a bill for 
redemption, by reason of non-payment of the mortgage- 
money at the time appointed by the Court, also operates 
as a foreclosure. 

Decree The Court, however, sometimes, instead of making a 

for sale. <j ecree f or foreclosure, directs a sale of the mortgaged 
property, when the purchase-money is applied in satis- 
faction of the mortgage, the surplus, if any, being paid 
to the mortgagor. In case of a deficiency, the mortgagee 
may recover the difference from the mortgagor. A recent 
statute has considerably extended the power of the Court 
to make a decree for sale instead of one for foreclosure, 
but the rule of the later Roman law, by which a fore- 
closure was never permitted, has not yet been adopted in 
England. 

Remedies A mortgagee has not only the right to foreclose, but he 
ga g ee r may ma y proceed to enforce at the same moment all the 
be pursued remedies to which, according to the nature of his security, 
concurrent- ^ e ma y ^ Q en titled. He may sue at the same time on his 
bond or covenant, bring his ejectment, and file his bill 
of foreclosure. If, however, the mortgagee should enter 
upon possession before foreclosure, he will be bound to 
account to the mortgagor for the rents and profits, while 
an action on the covenant will have the effect of opening 
the decree for foreclosure, that is, of letting in the mort- 
gagor to redeem on the usual terms. I have just ex- 
plained that after the mortgage has been forfeited by 
non-payment of principal or interest, the mortgagee is 
regarded as the absolute owner of the estate at law. He 
may, therefore, enter upon possession, but equity will compel 
him to account for every farthing of the rents and profits 
realized by him out of the estate. 

IecurU dent The k estl course for tne mortgagee, when there is reason 
to suspect that the security is insufficient, is to obtain an 
order for sale, or, if that cannct be done, to sue on his bond 
or covenant first, and then to foreclose for the remainder. 

A decree for sale would seem to be in all ordinary cases 
equally fair both to the mortgagor and mortgagee. 
Sale the " The natural course, and certainly the most convenient 
MuUahia an(1 Beneficial course," says Mr. Justice Story, " for the 
mortgagor, would seem to be for the Court to follow out 



EQUITY OF REDEMPTION. 21 

the civil law rules on this subject, that is, to say, pri- LECTURE 
marily and ordinarily, to direct a sale of the mortgaged 
property, giving the debtor any surplus after discharging 
the mortgage-debt ; and, secondarily, to apply the remedy 
of foreclosure only to special cases, where the former 
remedy would not apply, or might be inadequate or injuri- 
ous to the interests of the parties. This course has, accord- 
ingly, been adopted in many of the American Courts of 
Equity ; and it is also the prevailing practice in Ireland. 
It is done without any distinction, whether there is a 
power to sell contained in the mortgage or not." " And 
in most, if not all, cases," adds the learned author, " it 
would be equally beneficial to the mortgagee, as it would 
prevent the delays incident to the common decree of fore- 
closure, which is liable to be reopened ; and would also 
prevent any difficulty in obtaining the residue of the debt, 
when the mortgaged property is not sufficient to discharge 
it." (Story's Equity Jurisprudence, 1025.) 

Not only the mortgagor but all persons deriving an inter- Wlio may 
est from him, whether by purchase, devise, or descent, may ' e 
redeem the mortgage. It is on this ground that a subse- 
quent incumbrancer may redeem a prior mortgage. A 
lessee of the mortgagor after the mortgage will similarly be 
allowed to redeem. The proprietary right of the mort- 
gagor is very sharply defined in equity, and is fenced in by 
limitations which may not unreasonably be viewed as 
occasionally trenching on the just rights of the creditor. 
Thus, a Court of Equity would not only set aside, without Equity of 
the slightest hesitation, any transaction between the mort- canmrtVe 
gagor and mortgagee involving harshness or uneonscion- restrained. 
able dealing,but would not even suffer the mortgagor to fetter 
in any way his right of redemption by any agreement with 
his creditor. The right of redemption is regarded in equity 
as a natural incident to a mortgage. A proviso, therefore, 
limiting the right of redemption to the lifetime of the 
mortgagor will be void in equity, so also will a proviso 
restraining the equity of redemption to the mortgagor 
himself or to the heirs of his body. (Jason v. Eyres, 2 Ch. 
Cas., 33 ; Howard v. Harris, 1 Vern., 190.) A right of re- 
demption cannot also be taken away by an agreement at 
the time of the mortgage, that it should become absolute 
at the end of a limited period. So also, an agreement that 
the conveyance shall become absolute on payment of a 
further sum in ease the money is not paid on the appointed 



22 



LAW OF MORTGAGE. 



LECTURE 

* 



Second 
mortgage 
without 
notice. 



will not be allowed in equity, nor can a contract 
for a collateral advantage prevent the exercise by the mort- 
gagor of his right of redemption. (Willett v. Winnell, 
1 Vern., 487 ; Jennings v. Ward, 2 Vern., 520.) 

But equity extends its protection to the mortgagor still 
further, and refuses, for instance, to give to the mortgagee 
in possession any allowance for personal care or trouble 
in collecting the rents. It has been well said that the 
mortgagee in possession is a bailiff without a salary, 
accountable to the mortgagor but not paid by him. (Davis 
v. Dendy, 3 Mad., 170.) 

I speak with diffidence, but the hypothesis does not seem 
to be untenable that the extreme solicitude, exhibited by the 
English Court of Chancery for the mortgagor, is a relic of 
the old horror of usury (c), which was so common at one 
time, not only in Europe, but also in the East. English 
equity is, as we all know, a fabric into whose web have 
been woven various bodies of law, and the spirit of the 
canon law, first infused into it by ecclesiastical lord- 
keepers and afterwards "consecrated" by statute, still lingers 
in the practice of the Court, and shapes its doctrines. 

I may observe that by Statute 4 Wm. and M., c. 1G, a mort- 
gagor, who makes a second mortgage of the same property 
without giving notice to the intended mortgagee of the 
prior incumbranee, is absolutely barred of his equity of 
redemption as against such second mortgagee, and that a 
merely colourable addition of some comparatively insigni- 
ficant property in the second mortgage will not take 
the case out of the statute. (Stafford v. Selby, 2 Vern., 589.) 

Questions of priority, marshalling and tacking in the 
English law are complicated by the distinction between 
legal and equitable estates, and cannot be properly under- 
stood without some acquaintance with the history of English 
Equity Jurisprudence, and the mode in which the structure 
was gradually built up. I am obliged to pass over for the 
present these and similar topics connected with the English 
law of mortgage, and shall conclude only with a few 
observations touching the power of sale, which is generally 
to be found in English mortgages. Doubts were at 
one time entertained of the validity of an exercise of 
these powers of sale without the intervention of a Court 

(r) For a short historical sketch of usury, see Lecky's History of the 
Rise and Influence of the Spirit of Rationalism in Europe. Vol. II, 



LIABILITIES OF THE MORTGAGEE. 23 

of Equity, or the concurrence of the mortgagor. These LECTUKK 
doubts, however, have long been set at rest ; and it was 
enacted by 23 and 24 Viet., c. 145 (d), that the power might 
be exercised by every mortgagee unless it was negatived Power of 
by an express declaration in the security. The mortgagee, 
acting upon the power, may sell the property mortgaged 
to him of his own authority, and without the intervention 
of a Court of Equity. If, however, the power of sale is 
not expressly given by the deed of mortgage, the mort- 
gagee is bound to give at least six months' notice in writ- 
ing to the person, or one of the persons, entitled to the 
property subject to the charge. When the power of sale 
is conferred expressly by the instrument of mortgage, 
there is generally a provision to the effect that the power 
is not to be exercised until the expiration of a previous 
notice to the mortgagor. 

The mortgagee is regarded as a fiduciary vendor and is Liabilities 
bound to adopt every precaution which would be taken mortgagee. 
by a prudent owner to get the best price for the estate. 
The exercise of the power, therefore, by the mortgagee 
for fraudulent purposes will be prevented in equity, either 
by restraining or setting aside the sale. But the mortgagee 
is not a trustee of the power for the mortgagor, and the 
Court will not enquire into his motives for exercising it. 
(Nash v. Eads, 25 Sol. J., 95, overruling dicta of Stuart, 
V. G, in Robertson v. N orris, IGr. f., 421; 4 Jur., N. S., 155.) 
The mortgagee, however, may not buythe property himself, 
nor may his agent acting for him in the matter of the sale ; 
but a puisne mortgagee is not under any such disabilitj 7 , 
and is at liberty to buy in the same way as a stranger, 
provided he takes no undue advantage of his position as 
mortgagee. (Whitcomb v. Minchin, 5 Mad., 91; Martin- 
son v. Clowes, 21 Ch. D., 857 ; 51 L. J., Oh., 594 ; cf. Pitam- 
ber Narayen Das v. Vanmali Shamji, I. L. B., II Bom., 1.) 
But the mortgagee cannot proceed to exercise his power 
of sale upon tender to him of the principal, interest, and 
costs, and the tender may be made even in the auction- 
room. But the mere commencement of an action to redeem, 
will not prevent the sale. 

Notwithstanding the recent statutory extension of the 
power of sale, the English law does not permit a sale if the 
creditor expressly engage with the debtor not to exercise 

(^) Now replaced by 44 and 45 Viet., c. 41. 



24 LAW OF MORTGAGE. 

LKCTUBE the power. A different rule, as we saw, prevailed in the 
* Roman law. 

From the short sketch I have been able to give, you will 
observe that, although the English law of mortgage is in 
some respects " inelegant," the principles administered by 
the Court of Chancery have, in a great measure, shaped 
influence themselves on the model of the Roman law. The juris- 
on English prudence of England has been improved in many respects by 
law. the civil law ; but nowhere is the beneficial influence of 
that system more perceptible than in the view taken by 
Equity of the real character of a mortgage transaction. It 
does not fall within the province of this lecture to trace the 
gradual growth of this branch of the equitable jurisdic- 
tion of the Court of Chancery. But there are few things, 
I may be permitted to observe, more remarkable in legal 
history than the successive steps by which the law of 
mortgage in England was placed on its present footing. 
It is true that the materials were ready to hand, but the 
fabric had to be reared amid much discouragement and 
opposition and it required the labours of several gener- 
ations of Equity Judges to complete the structure (e). 
On the whole, English equity furnishes a remarkable 
monument of the triumph of common sense over professional 
prejudices, perhaps nowhere stronger than in the law. 
It marks the victory of natural justice over unmeaning 
technicalities, the triumph of enlightened reason over 
antiquated rules and worn-out formulas. 

(e) The sarcastic observation of Selden, although it has long- since 
lost its point, has passed into a proverb, while the opposition of Lord Coke 
to the jurisdiction of the Chancery Court has become matter of history. 
It seems that even so enlightened a Judge as Lord Hale, was not entirely 
free from that jealousy of Equity, which was so common at one time 
among English lawyers. The learned Judge is reported to have said 
with reference to the right of redemption enforced by the Court of 
Chancery in opposition to the rule of the common law, that "by the 
growth of equity on equity, the heart of the common law is eaten out." 
(RoscarricTi v. Burton, 1 Ch. Cas., 219.) 



CLASSIFICATION OF PLEDGES IN ROMAN LA.W. 25 

NOTE A. LECTURE 

The following diagram, together with the explanatory notes, taken I. 

mainly from Colquhouu's Civil Law, will clearly explain the classification 

of mortgages in Roman law. 

PlGNUS. PlGNUS. 



Generate. Speciale. Pignus Privilc- 



Speciale. Pignus Privile- Pignua 

giatum. Simplex . 

Qualilicatum. 
PIGNUS. 



Voluntarium. Necessarium. 

I I 

r~ ~~i i i 

Conven- Testamen- Legale. Pretorium 

tionale. tarium, sive 

Judiciale. 

The pignus volnntarium (voluntary pledge) is a constituted contract 
deposition ho minis, whether by the debtor himself, or by another on his 
behalf, or by last will ; but the necessarium (necessary) is the natural 
result of law or effected juris dispositions : the voluntary is subdivided 
into wnventionale and testamentctrium, and both may be express or tacit. 

The pignus conventional^ expressum (conventional and express) is 
founded on a contractus p'ujnoratitius in pledges, or pact um hypothecs 
in cases of hypothecation, and is constituted by the debtor declaring in 
express words that he grants a real charge upon a thing as a security for 
a debt incurred. The pignus taciturn (tacit) arises in the presumption 
of a transactiou, or from the implication resulting out of a special con- 
tract, such as signing the document, making over the pledge, or ceding 
the possession of an object to a creditor on account of his claim. 

Pignus testamentariiim (testamentary) is constituted by the testator 
expressly granting a right to the pledge under his hand ; and it is, 
moreover, taciturn when the nature of the testamentary disposition 
renders such pledge presumable by implication, as by bequeathing the 
annual revenue of an estate to a person, whereby he will acquire a tacit 
testamentary pignoratitian claim upon the estate itself. 

The pignus necessarium (necessary) is subdivided into (1) legate (legal 
or understood), or that which the law necessarily implies, so that there 
is no necessity for bargaining for it expressly ; neither will a bargain, 
to the contrary, be of avail, on which account it is said to be understood, 
and is therefore also called a tacit pledge ; and into (2) prcetorium 
(praetorian or judicial), otherwise termed judiciale, or that claim which 
the Judge assigns to one upon the goods of another for his security. 
(Colquhoun's Civil Law, 1466, 1467.) 



LECTURE II. 



Hindu law of bailments Conflicting texts Early notions of pledge in Hindu 
law and gradual modification of these primitive notions Relation of Hindu 
law to Comparative Jurisprudence Tradition originally essential to vali- 
dity of pledge Validity of pledge, unaccompanied by delivery of possession, 
acknowledged in Sib Chunder Ghose v. Russick Chunder Newjy Importance 
of Tradition in early law Heal and personal rights Possession not necessary 
in later Hindu law Priority of mortgage Possession important when any 
questions touching priority arose Conflicting texts cited side by side in Jagan- 
nath's Digest Mr. Justice Grant's judgment observed upon Jus gentium of 
the Koman law Pactum Praetorium Hypothecation in Hindu law Early 
notions of security, in Hindu law Pledgee had in early times only a right of 
detention Foreclosure, and power of sale, innovations Classification of 
pledges by Hindu lawyers Rule of Hindu law, interest, not to exceed prin- 
cipal Development of Hindu law of mortgage Rule requiring tradition 
gradually fell into disuse Commentaries on Mann Hindu mode of inter- 
pretation Text of Vrihaspati Equity of redemption and sale by judicial 
process Gradual improvement of Hindu law Hindu law of mortgage in its 
maturity Beneficial pledge and pledge for custody Important distinction 
between mortgage witli and mortgage without possession Nature of Dristi- 
liandhak Priority of mortgages in Hindu law Right of pledgee to sue when 
pledge is destroyed without his default Analogous rule in the Code Napoleon 
Equity of redemption of a usufructuary mortgage Rights of mortgagor 
Validity of second mortgage Character of Hindu law of mortgage. 

I NOW come to the Hindu law of securities, a branch of 
our law, which, I venture to think, may be placed by the 
side of the most advanced systems of jurisprudence. 
Hindu law An accomplished lawyer, whose memory will be always 
of bail- dear to Sanskrit learning, in speaking of our law of bail- 
" tef ments, has said : " It is pleasing to remark the simi- 
larity, or rather identity, of those conclusions, which pure 
unbiased reason in all ages and nations seldom fails to 
draw, in such judicial inquiries as are not fettered and 
manacled by positive institution ; and although the rules 
of the pundits concerning succession to property, the 
punishment of offences, and the ceremonies of religion 
are widely different from ours, yet, in the great system 
of contracts, and the common intercourse between man 
and man, the Pootee of the Indians and the Digest of the 
Romans are by no means dissimilar." (An Essay on the 
Law of Bailments, by Sir William Jones, p. 114.) The law, 
however, which moved the admiration of Sir William Jones 



CONFLICTING AUTHORITIES IN HINDU LAW. 27 

has ceased, in one sense, to be living law, and it is to be LECTURE 
sought at the present moment, not in our books of reports, n - 
but in the texts of our sages, and in the writings of the 
successive jurisconsults by whom Hindu law was gra- 
dually moulded into system. It is to that law, the truly 
indigenous system of the country, that I propose to call 
your attention in the present lecture. 

I must, however, warn you at the outset that it is by 
no means easy to thread one's way through the labyrinth 
of conflicting texts in which the law is sometimes in- 
volved. I intend to confine myself only to some of the Confl . . 
broader features of this branch of Hindu jurisprudence, texts!" ' 
But even with this limitation, I cannot but feel a certain 
degree of distrust in the soundness of my conclusions, a 
distrust, I may venture to say without presumption, per- 
haps, inseparable from the nature of the inquiry upon 
which we are now engaged. 

I have already said that the authorities upon which our 
conclusions must mainly rest, are not unfrequently con- 
flicting. The key to this conflict is to be sought in the 
fact that we have to trust to texts which, although some- 
times placed side by side, are of various antiquity, 
a fact which must be cai'efully borne in mind by the 
student of Hindu law. Whatever truth there may be in 
the reproach that the Hindus are an unprogressive race, 
even the most careless student of our law must admit 
that the charge must be received witli considerable re- 
servation. Hindu law is, no doubt, archaic, but there 
are portions of it which furnish unmistakable evidence 
of maturity. A not very friendly critic has said : " There Gradual 
is in truth but little doubt that, until education began to Jj^flff *'; 
cause the Natives of India to absorb Western ideas for mitive no- 
themselves, the influence of the English rather retarded l H n * in 
than hastened the mental development of the race. There 
are several departments of thought in which a slow modi- 
fication of primitive notions and consequent alteration of 
practice may be seen to have been proceeding before we 
entered the country ; but the signs of such change are 
exceptionally clear in jurisprudence, so far, that is to say, 
as Hindu jurisprudence has been codified. Hindu law is, 
theoretically, contained in Manu, but it is pi'actically col- 
lected from the writings of the jurists who have com- 
mented on him, and on one another." (Maine's Village 
Communities, p. 46.) 



28 LAW OF MORTGAGE. 

LECTURE In examining Hindu law, we must, I repeat, carefully 
n - distinguish the rudimentary stages of legal thought from 

its maturity; and it is because this has not always been 

done, that Hindu law has attracted to itself a cloud of 
undeserved prejudice. It may be said that it is not always 
possible to obtain direct evidence of the relative antiquity 
of the texts of Hindu law ; but in this, as in other- 
instances, a knowledge of comparative jurisprudence will 
greatly assist us in " unravelling the tangled skein " of 
legal history. Comparative jurisprudence is to the lawyer 
what comparative grammar is to the philologist ; and if 
the results yielded by the latter are more certain, it is 
only because its inductions are founded upon a wider 
basis. The conjecture, however, may be hazarded without 
Relation of rashness or presumption, that Hindu law will, at no 
Hindu law distant date, render the same service to jurisprudence 
tivTYuris- that Sanskrit has already done to the sister science of 

prudence, philology. 

I will illustrate my position by reference to a question 
connected with the Hindu law of securities which has pro- 
voked no little conflict of opinion. 

We saw that in Roman law a pledge was originally 
required to be accompanied by possession, and that it 
was only very gradually that hypothecation found a place 
in the jurisprudence of Rome. In the case of Sib 
Chunder Ghose v. Russick Chunder Neoghy (Fulton's 
Reports, p. 36), the question arose, whether a pledge, unac- 
companied by possession, was valid according to Hindu 
law. Conflicting texts were cited in the argument. The 
Necessity of plaintiff relied upon the text of Vrihaspati, " Of him, 
p^ s ' g v ^ r j on of who does not enjoy a pledge, nor possess it, nor claim 
in a Hindu it on evidence, the written contract for that pledge is 
pledge. nugatory, like a bond when the debtor and witnesses have 
deceased." (Colebrooke's Digest, Vol. I, p. 211, 126.) The 
defendant relied upon the text of Yajnavalkya : " By the 
acceptance or actual possession of a pledge the validity of 
the contract is maintained." (Colebrooke's Digest, Vol. I, 
p. 166, 96.) So also, Vyasa says : " Pledges are declared to 
be of two sorts, immoveable and moveable, and both are 
valid when there is actual enjoyment, and not otherwise." 
(Colebrooke's Digest, Vol. I, p. 211, 125.) The Judges 
were divided in opinion; but the majority of the Court held 
that whatever might have been the case in early times, the 
later Hindu law clearly sanctioned the validity of a 



REAL AND PERSONAL RIGHTS. 29 

pledge, although unaccompanied by possession ; and they LECTURE 
relied as well upon some of the written texts of Hindu 
law as upon the general usage of the country, the over- 
shadowing claims of which are acknowledged by every 
Hindu lawyer. One learned Judge, Mr. Justice Grant, how- 
ever, was of a different opinion, and I shall presently call 
your attention to the reasons given by him in his judgment 
as a striking illustration of the delusions which had at 
one time crystallized, in a more or less perfect form, round 
the so-called "law of nature;" but, before I do so, I 
must enter upon a discussion, which may perhaps at 
first sight seem to be somewhat out of place in the present 
lecture, but which a closer examination will, I trust, show 
to be relevant. I allude to the important part played by 
tradition or delivery of possession in early law. 

It seems that in the rudimentary stages of legal 
thought, there was no distinction between a contract and a 
conveyance. Sir Henry Maine has shown that, in the 
Roman law, contracts, as well as transfers, were origin- 
ally known by the same name, and were accompanied by 
the same formalities. In course of time, however, the 
notion of a contract disengages itself from the notion of 
a conveyance, and then we have the well-known distinc- 
tion between "real" and "personal" rights. (Ancient Real and 
Law, Chap. IX.) A " real right," or, jus in rem, is, as you P. er ;' onal 
are aware, a right availing against the world at large ; 
while a " personal right, " or, jus ad rem, is a right availing 
only against some determinate person or persons. Take 
the case of an executory contract of sale. If A agrees 
to sell a parcel of land to B, B acquires a personal 
rigTit against A to compel him to fulfil his contract ; 
or if that is impossible, B can compel A to compensate 
him for the breach. But B would acquire no right 
whatever as against third persons who might withhold the 
land from him, the right being a mere personal right, 
arising out of an agreement. But if A, in pursuance of 
the contract, conveys the land to B, B is said to acquire a 
real right, which he can assert against third persons. Now 
in ancient law there could be no valid conveyance of land, 
unless the transaction was accompanied by tradition or 
delivery. Possession was, therefore, an essential element 
in the acquisition of a real right. " The acquisition of pos- Possession 
session," says Mr. Justice Markby, "has in all systems of necessar y 
law, European and Oriental, been always treated as a most acquisition 



30 t AW OF MORTGAGE. 

LECTURE important element in the acquisition of title. Tinder 
** the Roman law, it was absolutely essential, traditioni- 

ofnreai bus et usucapionibus non nudis pactionibus rerum 
dominia transferuntur, and this is what a Roman law- 
yer considered as the natural by which he meant the 
universal mode of acquiring property. The same notion 
prevailed, and still prevails to a greater or less extent, 
in every country in Europe. The French Code recog- 
nizes it emphatically in the phrase " enfait de meu- 
bles la possession vant titre!" The necessity in some cases 
of delivery of possession in order to complete title is also, 
as is well known, recognized by the Mahommedan law ; 
and there is no ground for saying, as far as I can see, that 
its effect is ignored by the Hindu law. On the contrary, I 
imagine, the title of a purchaser from a person who is not 
the true owner, which, under certain circumstances, is, 
or certainly was, recognized by the Hindu law (see 
Jagannatha's Digest, Book II, clause 2, II, para. 48), 
depended entirely on possession. In the Mitakshara, 
Chapter III, 3 to 6 of the portion contained in the 
work of W. H. Macnaghten, there is a very elaborate dis- 
cussion on possession ; and in section 6 there occurs this 
passage : " It has been shewn that possession, when 
accompanied by a title, is evidence of right ; but lest it 
should be supposed that a title without possession affords 
equal proof, it is declared, ' where there is not the least 
possession, there the title is not weighty. ' Such is the 
intent. With whatsoever title there is not the least occu- 
pancy, in that title there is no sufficient weight." These 
passages seem to me to shew that, even in Hindu law 
by obtaining possession, a man not only obtained enjoy- 
ment under his title, but that he went through a ceremony 
which in some cases was highly efficacious in completing 
his title." (Salim Sliaikh v. Boidonath Ghuttaclc, XII 
Suth. W. R., 217; III Ben. L. Rep., A. C. J., 312.) 

Various explanations have been suggested of the origin 
of this rule. But whatever might be the origin of the rule, 
there can be ver}^ little doubt that it was retained in almost 
every system of law, because it served a useful purpose. As 
a conveyance transferred a real right, it was very desirable 
that it should take place openly, and change of possession 
was, perhaps, best calculated to accomplish this object. 
The inconvenience of the proceeding, however, must have 
suggested the gradual relaxation of the rule ; and in the 



MITAKSHARA ON CORPOREAL ACCEPTANCE. 31 

maturity of jurisprudence, tradition loses its original im- LECTUEB 
portance, and is almost everywhere, in time, replaced by 
a system of registration of titles. It has been thrown out 
by a learned writer that the first relaxation probably 
took place in the case of mortgages, and an examination 
of the Roman law would certainly seem to show that, 
in the Western world at any rate, this wsis the case 
(Markby's Elements of Law, 529, 530). The Roman 
praetors, in recognizing the validity of a hypothecation, 
broke in upon, what I may call, the rule of the common 
law, a rule which was retained in Roman jurisprudence Possession 
to the last, by which no real right could pass without tra- J^"^"" 
dition. It is not possible to say whether precisely the later Hin- 
same course of development was followed by the Hindu du law * 
law. There can, however, be little doubt that in mature 
Hindu law, the. rule requiring tradition had fallen into 
disuse, and that a real right, whether by mortgage or sale, 
could be conferred by a mere expression of the inten- 
tion of the parties. A critical examination of the subject 
would be beyond the scope of the present lecture ; and 
I shall content myself only with citing a passage from the 
Mitakshara (Chap. Ill, 6, paras. 4, 5), which shows the 
state of the Hindu law on the point when that treatise 
was compiled : " The acceptance of gold, cloths, &c., 
being completed by the ceremony of bestowing water, and 
falling, therefore, under either of the means, may be de- 
signated as a three-fold acceptance ; but in the case of 
land, as there can be no corporeal acceptance without 
enjoyment of the produce, it must be accompanied by some 
little possession : otherwise the gift, sale, or other transfer 
is not complete. A title, therefore, without corporeal Priority of 
acceptance, consisting of the enjoyment of the produce, is mort s a e ' 
weaker than a title accompanied by it, or with such corpor- 
eal acceptance. But such is the case only, when of these two 
the priority is undistinguishable ; but when it is ascer- 
tained ivhich is first in point of date, and which posterior, 
then the simple prior title affords the stronger evidence" 
(Macnaghten's Hindu Law, Vol. I, pp. 218-219.) (a.} 

() A somewhat different view has, however, been taken by the 
Bombay High Court, and, according to the most recent decisions of that 
Court, a transaction not completed by delivery of possession, must, in 
theory at least, be regarded as incomplete and cannot generally speak- 
ing, be enforced as against a purchaser for value without notice, except 
where the rigour of the old Hindu law has been relaxed by local 
usage. But the Bombay High Court holds at the same time that 



32 LAW OF MORTGAGE. 

LECTURE I have dwelt at some length upon the subject of posses- 
IL sion, because Hindu law cannot be properly understood 
without some general knowledge of comparative jurispru- 
dence, which alone can furnish us with a key to the apparent 
Conflicting conflict in our written law. In the Digest of Jagannath, 
texts. g - j e ky g j(j e w ith texts which belong to the infancy of law, 
we find others which belong to a much more advanced 
stage of legal thought. Our knowledge of the gradual 
progress of law in the Western world will, however, enable 

registration atones for the absence of possession, for which it is a 
sufficient substitute. The law on this subject is thus formulated by 
"VVestropp. C.J., in LaTtslimandas Sarupckand v. Dasoat,!. L. R., VI Bom., 
168, F. B.; of. pp. 176181. 

It is a general but not an invariable rule, that possession in the grantee 
is essential, amongst Hindus and Mahommedans, to the complete transfer, 
either by gift, sale, or mortgage. (See the cases cited in the judgment.) 
To this general rule as to necessity for possession, tne following excep- 
tions have been permitted, viz. 

First Cases of san-mortgage in Guzarut. 

Secondly Cases in which the only contending parties are the mort- 
gagor or volunteers claiming under him, and the mortgagee or persons 
claiming under him ; or, the vendor or volunteers claiming under him, 
and the vendee or persons claiming under him. 

Thirdly Cases in which the subsequent mortgagor or purchaser became 
such, with actual notice of the earlier mortgage or sale, without pos- 
session. 

fourthly If the mortgagee be in possession, the mortgagor, though 
out of possession, may charge or sell his equity of redemption. 

Fifthly Where the mortgagor has not put the mortgagee in possession, 
and subsequent to the mortgage, has been wrongfully dispossessed, the 
mortgagee may bring a suit against the wrong-doer for possession of the 
mortgage-land. 

Sixthly Possession by a judgment-debtor, having a good title, is not 
necessary to validate a judicial sale of his lands. 

Seventhly Possession by the vendee, who becomes such at a judicial 
sale, is not necessary to validate the sale to him. as against subsequent 
attaching creditors under money-decrees, or, as against purchasers at the 
sale under such decrees. 

Eighthly The purchaser at a judicial sale may re-sell, without pre- 
viously taking possession. 

Cf. Sobhagchand ZulabcJiand v. Bhaichand, I. L. R., VI Bom., 
193 ; Bapujl Balal v. Satya Bliama Bai, I. L. R., VI Bom., 490 ; Naran 
Purshotam v. Dolatram Virchand, I. L. R., VI Bom., 538 ; Raja Sahib 
Perhlad Sein v. Baboo Budhoo Sing, XII Moore Ind. App., 275 ; S. C., 
II Ben. L. Rep. (P. C.), Ill ; Ranee Bhobosoondree Dasseah v. Issur 
Chunder J)utt, XI Ben. L. Rep., 36 ; S. C., XVIII Suth. W. R., 140. But. see 
Gvngahurry Nandee v. Raghubram Nun-dee. XIV Ben. L. Rep., 607 ; 
B.C., XXIII Suth. W. R., 131 ; Narain Chunder Chi/ckcrbutty v. Dataram 
Roy, I. L. R., VIII Calc., 597, F. B. ; Golla Chinna Gunwuppa Naidu v. 
Kali Appiah Naidu, IV Mad. H. C. Rep., 434 ; Sadagopa Chariyar v. 
Rutlma Mudali, V Mad. H. C. Rep, 457. Cf. Varden Seth Sam v. 
Lucltpathy Royjee Lallah, IX Moore Ind. App., 303; but see Naruin, 
Chunder Chuckerbutty v. Dataram Roy, I. L. R., VIII Calc., 6U7 ; 
Ramasami v. Marcviuttit, I. L. R., VI Mad., 404. 



KOMAN LAW OF PLEDGE. 33 

us to determine with tolerable certainty the historical LECTURE 
order of the different authorities upon which our con- 
clusions must rest. The inductions of comparative juris- 
prudence are as yet, no doubt, founded upon a limited 
basis, but it may be safely affirmed that the written texts 
of Hindu law, which require the delivery of possession by 
the mortgagor to the mortgagee, are older than those 
which do not insist upon tradition. To borrow a figure 
from geology, the written texts which require the delivery 
of possession, constitute the lower, while those that dispense 
with it, constitute the upper strata, as it were, in the form- 
ation of Hindu Law. It seems to me, with very great 
deference, that this simple fact is not sufficiently attended 
to by Mr. Justice Grant, in his elaborate judgment, in the 
case of Sib Chunder Ohose v. Russick Chunder Neoghy, in 
which the learned Judge is reported to have said : " In 
questions, therefore, which concern the laws of countries 
into which the feudal law has not been introduced, it is of 
importance to begin by ascertaining what the Roman law 
was upon those questions, because it is the best digest of 
the rules which affect the rights and obligations of man- 
kind according to the natural principles common to all 
nations. If we find the law laid down in any treatise 
upon the subject which is in question, conformable to the Jus genti- 
principles of the Jus gentium stated in the Roman law, 
we are entitled to believe that it is correctly laid down. law. 
If we find it declared to be otherwise, we are driven to 
search for some reason in the circumstances of the people, 
which shall account for their institutions in that matter 
differing from those of the rest of mankind. If we find 
authorities in their law differing and equally balanced, we 
must believe those to be correct which agree with the 
general principles of natural law still more if we find the 
majority agreeing with those principles and expressing 
themselves clearly, and -the minority apparently differing 
from them and expressing themselves more obscurely and 
less decidedly." (Fulton's Reports, pp. 43-4.) 

Mr. Justice Grant then proceeds to examine what 
he calls "the general principles of natural law," as they 
are to be found in the Roman law. After stating that 
there could be no valid pledge without possession, 
whether in the case of land or of moveables, the learned 
Judge, referring to the hypothecation of the later Roman 
law, says : " The Jus Hypothecce was limited to certain 

K. B. G., M. 3 



34 LAW OF MORTGAGE. 

LECTURE securities, chiefly, if not solely, over immoveable property, 

IL and to certain cases, and under certain regulations, afforded 

Pn^l bv the Equity of the prsetor. It was Pactum Prwtorium, 

f UttU7/ J ~l If * ,.. f, i ,, . 

Prcetorium. no t arising out of general principles ot law, or forming 
part of their common law, or jus non scriptum, but a 
municipal institution introduced by that magistrate. Puf- 
fendorff confines this security of pledge expressly to the 
giving the creditor some certain thing in pawn till the debt 
be paid, and considers the hypothec of the Romans to 
have been confined to immoveable property. ' The distinc- 
tion,' says Sir William Jones, ' between pledging where 
possession is transferred to the creditor, and hypothecation 
where it remains with the debtor, was originally derived 
from the Attick law.' In what circumstances the Athenians 
admitted the hypothecation, we do not know. But that 
with them, as with the Romans, delivery of possession 
was necessary to constitute pledge by what we may call 
their Common Law, there seems no doubt. This, therefore, 
was the law of the whole ancient world of civilized Europe, 
extending as well to immoveable as to moveable property 
secundum jus gentium. And it is also the law of the 
whole of modern Europe in regard to moveables." (Ful- 
ton's Reports, pp. 45-6. See Collydass Gangopadhaya v. 
Shibchunder Mullick, Morton's Reports, 111. Cf. Sib- 
narain Ghose v. Rassikchundra Neoghy, Morton's Reports, 
105.) The learned Judge, therefore, conies to the con- 
clusion, that tradition is necessary to the validity of a 
pledge in Hindu law a conclusion which, we are told, is 
in conformity with " the general principles of natural law." 
If it were not for the peculiar views about the law of 
nature, so widely prevalent at one time, Mr. Justice Grant 
Hypothe- could hardly have failed to perceive, that the Hindu law 
cation in might have been developed in course of time in the same 
aw< manner, as the Roman law was developed by the introduc- 
tion of the hypothecation. The evidence which I have 
just analysed, though fragmentary and, it must be confessed, 
occasionally of dubious value, shows, on the whole, that 
such modification did actually take place in our law, and, 
as you will presently see, also in the Mahommedan law 
by a process which may be described as one of gradual 
absorption. We have here an instance of j uridical improve- 
ments in the West repeating themselves in the East. 

We have seen how in one respect the Hindu law slowly 
matured itself. I will now proceed to discuss another 



TEXT OF MANU. 35 

question which has also given rise to considerable conflict LECTURE 
of opinion, a conflict which has added not a little to the n - 
evil reputation for uncertainty which the Hindu law has 
acquired. 

We saw in the last lecture that in the Western world a 
security was originally regarded only as a means of compel- 
ling the debtor to fulfil his engagement, and that it was 
only very slowly that Roman jurisprudence emancipated 
itself from this conception. The questions naturally sug- 
gest themselves. Were there any analogous movements in 
Hindu law ? Are there any traces in Hindu law of the 
primitive notions of a security ? Now, an examination of 
our law shows, as I have already said, that a real security 
was a comparatively late development in Hindu jurispru- 
dence. The earliest record of Hindu law which we possess, 
discloses that stage of legal thought in which a security 
is limited to a bare right of detention. Manu says : Early no- 
" Whatever the length of time, a pledge may neither be tions of 
sold nor assigned by the pledgee." (Sir William Jones's HinduTaw? 
Manu, Ch. VIII, 143.) Here we find the very same 
restrictions upon the rights of the creditor as we 
found in early Roman law. In course of time, however, 
these restrictions were withdrawn, and the security of the 
pledgee in Hindu law became a true real security. The 
change was accomplished by the successive jurisconsults, 
by whom, in the absence of direct legislation, the improve- 
ment of our law was carried on. The authority of Manu 
is never openly disowned, and yet we find in the mature 
Hindu jurisprudence the rule, laid down in the code, reduc- 
ed to very narrow limits ; the dictum of Manu being 
confined to the single case of a pledge in which the credit- 
or is permitted to receive the profits in lieu of interest, 
and the right to redeem the pledge is, by the express 
agreement of the parties, unlimited as to time. (Cole- 
brooke's Digest, Vol. I, pp. 194-199, 117.) In order to 
explain myself, I ought to state that, in the later Hindu 
law, a pledge might either be limited as to time, or it 
might be for an indefinite period. It might also either be 
a pledge for use, or for mere custody. In the pledge for a 
limited time, as opposed to a pledge for an indefinite time, qiassifica- 
the property, by the express terms of the agreement, tion of 
passed to the creditor on the default of the debtor. In 
the pledge for use, as distinguished from a pledge for 
custody, the pledgee was entitled to use the thing pledged 



36 LAW OF MORTGAGE. 

LECTURE to him, but no interest was permitted to be taken by 
ir - the creditor in addition to the usufruct. It is not neces- 
sary to discuss the rules peculiar to each of these classes. 
All that I wish to observe is, that the division of 
securities into pledges for a limited period, and pledges 
for an indefinite time, marks an advanced stage of juri- 
dical thought. No trace of any such classification is to 
be found in Manu, although the distinction between 
beneficial pledges and pledges for custody, is pointed out 
in the code. In the maturity of Hindu jurisprudence, the 
creditor possessed a real security in every case in which 
the pledge was for a limited period, and in some cases, also 
where the pledge was for an indefinite time. In the case 
of a pledge for an indefinite time, if the pledge was one for 
custody only, and not for use, the property passed to the 
creditor when the debt doubled itself, Hindu law prohibit- 
ing the accumulation of interest exceeding the principal. 
(Colebrooke's Digest, Vol. I, pp. 202-204, 119.) The law, 
however, went a step further when it allowed the creditor 
to sell the pledge and repay himself out of the proceeds, 
even when a forfeiture was guarded against by the express 
stipulations of the parties. The pledgee was entitled to 
exercise this right, if the pledge happened to be of the 
class known as a pledge for custody, and the debtor failed 
to redeem after the interest had become equal to the prin- 
cipal. It would seem that in the last case the creditor 
only possessed the right to sell the pledge. In every other 
case, a sale was entirely at the option of the mortgagee. 
Develop- The foregoing sketch shows how a pledge in Hindu law, 
Hindu law 6 lifted by Manu to a bare right of detention, ripened, in 
of mort- course of time, into a true real security. This was accom- 
plished by a series of limitations, imposed upon the very 
broad proposition which we find in the code. It is not 
always possible to trace the successive stages of the progress 
of Hindu law; but in the present case, I think, the 
task can be accomplished with tolerable certainty. The 
first improvement appears to have been the introduction of 
a clause, by which the debtor agreed to the property in the 
pledge passing to the creditor upon default. The division 
of pledges, which we find in the later Hindu law, into 
pledges for a limited and pledges for an unlimited period, 
is nowhere alluded to by Manu, and there can, I think, be 
but little doubt, that the classification denotes a very great 
advance in legal thought. Partly by calling in this dis- 



IMPROVEMENTS IN HINDU LAW OF SECURITY. 37 

tinction, and partly by help of the distinction between LECTURE 
pledges for use and those for mere security, the successive n - 
commentators pared down the rights of the pledgor to what 
would seem to be reasonable limits. The commentators, Commen- 
who, as I have already said, always professed the very 
greatest veneration for the text of the code, explained the 
dictum of Manu as having reference only to cases in which 
there was no express agreement that the pledge should be 
forfeited on the default of the debtor. This was the first of 
the series of limitations by which the application of the text 
of Manu was gradually narrowed. Chandeswara, Vachas- 
pati, Bhavadeva, all concur in the opinion that the text 
applies only to a pledge in which there is no special agree- 
ment by which the right of the debtor is liable to forfeiture. 
(Colebrooke's Digest, Vol. I, pp. 194199, 117.) It 
was not long before the law was further developed. The 
process by which this was accomplished was by presuming 
the existence of a clause of forfeiture when the debt doubled 
itself in the case of a pledge for custody. The text of 
Manu was now narrowed down, by an ingenious construc- 
tion, only to the single case of a beneficial pledge, in which 
no time was limited for redemption. I have, however, 
passed over an intermediate stage in the development of 
the law, in which the pledgee for custody was entitled to 
use the pledge after the accumulation of interest to the 
extent permitted by the law. The latest improvement, as 
I have already said, consisted in the right, which the law 
gave to the creditor, to sell the pledge, even when there was 
an express stipulation that the property should not be 
forfeited although the debt was doubled. I shall now 
call your attention to a discussion in the Mitakshara 
(Chap. VI, Sec. 6, 58), which, while it confirms the truth Hindu 
of the proposition that a real security was a late pro- P ode of 
duct of Hindu jurisprudence, offers an apt illustration of 
the method of interpretation followed by Hindu commenta- 
tors. Referring to the text of Vrihaspati (6) " Gold 
having doubled, and the stipulated period having expired, 
the creditor becomes owner of the pledge after the lapse of 
fourteen days. If the debtor repays the amount within 
that time, he shall get back the pledge," the author of 
the Mitakshara says : " A question arises that the pledge is 

(J) This text is attributed to Vrihaspati by the author of the 
Mitakshara ; but Jagannatha attributes it to Vy asa. (Colebrooke's Digest, 
Vol. I, p. 192, 116.) 



38 LAW OF MORTGAGE. 

LECTURE forfeited is not consistent, because there is neither a gift 
JI - nor sale, &c., by which the right of the debtor can cease ; 
neither is there an acceptance, nor purchase, &c., by which 
the right of the creditor can accrue ; and that it is also 
contrary to the text of Manu ' However long the time 
may be, neither an assignment, nor a sale of a pledge, can 
be made.' ' However long the time may be/ means for 
whatever length of time the pledge has been in the cus- 
tody of the pledgee. ' Assigned ' means pledged to a third 
person by the pledgee. Hence, by the prohibition of 
assignment and sale, it is evident that the right of the 
pledgee does not accrue. Answered. It is a well-known 
popular notion that a transfer by pledge is a qualified 
cause of the loss of right ; and acceptance of the pledge, 
a qualified cause of the creation of right. Consequently, 
after the debt has doubled, and the stipulated time has 
arrived, the right to satisfy the debt ceases, and by 
virtue of this text, the debtor's right is lost for ever, and 
that of the creditor accrues. Nor is it contrary to the text 
of Manu ' After no length of time, neither an assignment, 
nor a sale of the pledge, can be made.' For this is said by 
the sage (Manu) on the subject of a pledge for use, as he 
commences by saying : " If he take a beneficial pledge, he 
must have no other interest on the loan.' " 

You will remember that the passage in Manu was ex- 
pounded by some commentators as applying only to 
pledges, whether for use or custody, where there was no 
express agreement that the property should be forfeited 
on default. But we find that the author of the Mitakshara 
Gradual places a still more restricted interpretation on the text 
l mentlt ' ^ Manu. This was the way in which Hindu law was gra- 
iiiudu law. dually improved, under conditions which were certainly 
not very favourable to progress. Referring to the develop- 
ment of law by successive comments by jurisconsult upon 
jurisconsult, Sir Henry Maine says : " Even so obstinate a 
subject-matter as Hindu law, was visibly changed by it 
for the better. No doubt the dominant object of each 
successive Hindu commentator is so to construe each rule 
of civil law as to make it appear that there is some sacer- 
dotal reason for it; but subject to this controlling aim, 
each of them leaves in the law, after he has explained it, a 
stronger close of common sense and a larger element of equity 
and reasonableness than he found in it as it came from the 
hands of his predecessors." (Village Communities, p. 47.) 



HINDU LAW OF PLEDGE IN ITS MATURITY. 39 

We have now arrived at the state in which the Hindu LECTURE 
law stood in its maturity. We find that if the debtor 
committed default, the property in the pledge passed to 
the creditor, who might, however, in the exercise of his 
discretion, sell the pledge ; when, if there was a surplus, Hindu law 
the debtor became entitled to it. In the case, however, of "ag^'its 
a pledge for custody, where there was an express stipula- maturity, 
tion against forfeiture, the creditor could not foreclose, but 
could only exercise the right of sale. The only case in 
which there could be neither a sale nor a foreclosure, was 
when the pledge was of the description known as a " bene- 
ficial pledge," and the right of redemption was, by the 
express agreement of the parties, not limited to any parti- 
cular period. The creditor was in no danger of losing his 
interest, and the law, therefore, left him to the terms of his 
contract with the debtor. 

It would seem that a sale of the pledge through judi- 
cial process was not wholly unknown to the ancient Hindu 
law. Katyayana says : " When the pawner is missing, let 
the creditor produce his pledge before the king ; it may 
then be sold with his permission : this is a settled rule. 
Receiving the principal with interest, he must deposit the 
surplus with the king." (Colebrooke's Digest, Vol. I, 
p. 206, 122.) This text, therefore, shows that the cre- 
ditor was not, in all cases, entitled to sell the pledge of his 
own authority. It is curious to observe that a somewhat 
similar provision existed in the Roman law. 

We have already seen that, in later Hindu law, it was not Distinction 
necessary that a pledge should be accompanied by posses- 
sion. It must not, however, be supposed that a mortgagee, wit 
who omitted to take possession, was in the same favourable mo 
situation as one who took the precaution of publish- possession. 
ing his mortgage, if I may use the expression, by taking 
possession of the property pledged to him. Whenever any 
question of priority arose, the mortgagee in possession, 
though his mortgage might be later in date, was always 
preferred to the mortgagee who had neglected to enter 
upon possession. " If two men, to whom the same property 
has been pledged, enter into a contest, to him who has 
possessed the land it shall belong, if no force were used." 
(Smriti ; cited in the Ratnacara ; Colebrooke's Digest, Vol. I, 
p. 217, 131.) It would seem, from the use of the 
expression " without force," that the possession must be one 
acquired in good faith, and the text seems to limit the 



4,0 LAW OF MORTGAGE. 

LECTUEE preferable right of the puisne incumbrancer in possession, 
n - only when the money has been advanced without notice 

of the prior mortgage. 

Nature of While upon this subject, a few words on a kind of 
Dristi- mortgage very common in the Southern and Western 
' Presidencies will not perhaps be wholly inappropriate. 
This is the Dristi - Bandhak, or a mortgage of visible 
things. In this kind of mortgage, the mortgagor remains 
in possession till default is made by him, when the mort- 
gagee becomes entitled to enter upon possession as absolute 
owner of the property. It is with reference to this class 
of mortgages that Sir Thomas Strange says : " It may 
be doubted whether this mode of pledging be not origin- 
ally Hindu instead of Attic as has been supposed." (Hindu 
Law, Vol. I, p. 288.) The existence of this class of mort- 
gages shows very clearly that Hindu law had long outgrown 
that stage of juridical thought in which tradition is 
regarded as essential to the constitution of a mortgage. 

I have already shown how, in certain cases, the priority 
of mortgages was determined by possession. I shall now 
state some other rules governing priority in Hindu law. 
A mortgage in writing was preferred to a parol mortgage. 
" If a pledge, a sale, or a gift of the same thing be alleged 
to be made before witnesses to one man, and by a written 
instrument to another, the writing shall prevail over the 
oral testimony, because one contract only is maintained." 
(Sinriti, Colebrooke's Digest, Vol. I, pp. 220-21, 134.) 
Another rule is to be found, by which a writing in which 
the property mortgaged is clearly defined, is preferred to 
one in which there is no such specification of the property 
intended to be pledged. " But, if a man first mort- 
Priority of gage land without noticing all circumstances, and after- 
inHindu S war( ^ s mortgage it with express description by name and 
law. the like, that writing which contains an express distinc- 

tion shall prevail. If a field or a house be described in 
a written instrument by its limits, and if villages and the 
like be so described, the contract is valid. When a dis- 
tinction is expressed in a writing to one man, and no dis- 
tinction to another, the express distinction, says Katyayana, 
shall preponderate." (Smriti, Colebrooke's Digest, Vol. I, 
p. 222, 135.) A general hypothecation does not seem to 
have been recognized by the Hindu law. A text cited in the 
Digest says," If a man pledge his property, unexhibited 
and undescribed as to its nature, and consequently im- 



DESTRUCTION OF PLEDGE. 41 

perceptible like the subtile element, that shall not be LECTUEE 
considered as a definite pledge." (Colebrooke's Digest, 
Vol. I, p. 225, 136.) There are one or two more points in 
connection with Hindu law which deserve notice. " Mort- 
gaged land," says Yajuavalkya, " being carried away by a 
rapid stream, or being seized by the king, another pledge of 
land must be delivered, or the sum lent must be restored 
to the lender." (Colebrooke's Digest, Vol. I, p. 168, 100.) 
Similarly, Katyayana says : " Whatever pledge has been 
lost by the act of God or the king, the debt for which it 
was given shall be paid by the debtor to the creditor with 
interest." (Colebrooke's Digest, Vol. I, pp. 169-170, 100.) 
Vrihaspati also says, " If a pledge be destroyed by the SJn^oi" 
act of God or of the king, the creditor shall either obtain pledge, 
another pledge, or receive the sum lent together with in- 
terest." Narada says, " When a pledge, though carefully 
preserved, is spoiled in course of time, another pledge must 
be delivered, or the amount of principal and interest must be 
paid to the creditor. " (Colebrooke's Digest, Vol. I, pp. 165- 
166, 93, 95.) An analogous rule is to be found in the 
French Code, Article 2131 of which says : " In like manner, c f* o *~ 
in case the present moveables or immoveables, subjected p ' 
to mortgage, have perished, or sustained deterioration in 
such manner, that they have become insufficient for the 
security of the creditor, the latter shall be permitted either 
to sue immediately for repayment or to obtain an addi- 
tional mortgage." (Cf. s. 68, cl. (6) and cl. (c) of the 
Transfer of Property Act.) 

The Hindu law did not permit the redemption of a 
usufructuary mortgage for a definite period before the ex- 
piration of the term. The rights of the mortgagor are, 
no doubt, guarded with scrupulous care, but the sentimental 
tenderness for the debtor, which sometimes overlooks the 
just rights of the creditor, finds no place in our ancient 
law. " W T hen a house or field, mortgaged for use," says 
Vrihaspati, " has not been held to the close of its term, 
neither can the debtor obtain his property, nor the credit- 
or obtain the debt." The lawgiver, however, adds : " After 
the period is completed, the right of both to their respective 
property is ordained; but, even while it is unexpired, they 
may restore their property to each other by mutual con- 
sent." (Colebrooke's Digest, Vol. I, p. 199, 118.) 

I shall conclude with a few observations on the general Rignts of 
rights of the mortgagor. The mortgagor, notwithstanding mort s a s r - 



42 



LAW OF MORTGAGE. 



LECTUBE the mortgage, could deal with the property as owner, sub- 
II. j ec t to the limitation that he was not permitted to do any- 

thing which might impair the security of the mortgagee. 

He could make a gift or sale of the property, and the 
transferee would, in either case, have the right to redeem 
the mortgage. Raghunandana, in his Dayatattwa, says: 
" Thus also if the pledge be not redeemed by reason of 
death or the like of the seller or donor, it may be redeem- 
ed by the buyer or donee, because a right equal to that of 
the former owner has been generated by the sale or gift. 
In such a case, if a dispute arise as to the source of the 
right, then the buyer or the douee (who is admitted as 
such) is required to prove his possession, and not the com- 
mencement of his title." (Dayatattwa, translated by Go- 
lap Chandra Sarkar Sastri, 16, p. 32.) The passage 
is also interesting as showing, that hypothecation was a 
common mode of mortgaging property, at least in Bengal, 
in the sixteenth century. 

A text of Vishnu is sometimes cited to show that a 
second mortgage was not permitted by the Hindu law. 
"He who has mortgaged," says Vishnu, " even a bull's 
hide of land to one creditor, and without having redeemed 
it, mortgages it to another, shall be corporally punished 
by whipping or imprisonment ; if the quantity be less, he 
shall pay a tine of sixteen suvernas" (Colebrooke's Digest, 
Vol. I, p. 216, 129.) The text, however, would seem to 
point to a fraudulent second mortgage, executed by the 
debtor without disdrosing the prior mortgage, a fraud 
which the Hindu law, in common with other systems, is 
careful to guard against. The reasoning of the Bengal 
lawyer would seem to show, that no exception could be 
taken to a second mortgage honestly created by the debtor ; 
while the extremely severe penalty attached to a violation 
of the duty which the text imposes on the mortgagor, also 
points to the same conclusion. 

I have now brought down the history of Hindu law to 
of' HtatS its maturit y- ! regret that the limits I am obliged to pro- 
pose to myself, will not permit a fuller account. The 
Hindu law of security, however, deserves very careful 
study, and I trust I shall not be accused of an idle pride 
in my own national system, if I venture to affirm that 
although not quite so perfect as the Roman law, it is still, 
on the whole, a model of good sense and logical con- 
sistency. 



Validity 
of second 
mortgage 



law oi 
mortgage. 



LECTURE II. (Continued.) 



Mahommedan law of mortgage Gradual assimilation with Hindu law 
Difference between Mahommedan law and Hindu and English law 
Analogy between Mahommedan law and Roman law Rahn, literally 
detention Pledge invalid unless followed by transfer of possession Con- 
flicting opinions of Mahommedan lawyers on the point Possession being 
essential to the validity of a pledge, things incapable of seizin cannot be 
pledged Things which could be sold, but of which possession could not be 
given, could not be pledged The contrary opinion held by Shafei Pawnee 
lending the pledge to the pawner, is freed from responsibility during the 
loan, but he may resume it at pleasure, and then his responsibility reverts 
A debtor may transfer his debt upon a property in the hands of another 
person Seizin not necessary under the Maliki law An equity of redemp- 
tion cannot be the subject of a gift, though it can be sold Observation 
that this is probably a narrow construction of the Hanafi law Power of 
sale in Mahommedan law Rights of pledger Rights of pledgee Conse- 
quences of loss or destruction of pledge The expenses of custody of the 
pledge rest upon the pawnee, and those of preservation upon the pawnor ; 
taxes are defrayed by the pawnor Tithes must similarly be paid by 
the pawnor Pledge must be only for existing debt Case of pledge for 
contingent debt Pledgee bound to produce the pledge on receiving a 
partial payment Destruction of the pledge by the pawnor and by a 
stranger Interest unlawful Influence of this rule in retarding develop- 
ment of law of pledge Qualified power of sale Must be given by contract 
itself B3 r e-bil-wufa, a comparatively modern innovation Conflicting opin- 
ions of Mahommedan lawyers as to its legality Opinion of Mahommedan 
law officer in Bussunt Ally's case Recognition of validity of Bye-bil-wufas 
in India Bye-bil-wufa really a security, not a sale Gradual recognition of 
hypothecation Probable influence of Hindu law No distinction between 
pledges of land and pledges of moveables Moveables, originally the subject 
of pledge Gradual extension of pledge of land Hypothecation Gra- 
dual relaxation of the rule rendering tradition essential. 

I WILL now proceed to give a short outline of the Mahom- 
medan law of securities. The Mahommedan law, however, 
to which I shall ask your attention in this lecture, is 
not the law which is administered at the present day by 
our Courts of Justice, but that which is to be found in the 
authoritative treatises of Mahommedan doctors. Mahom- 
medan law has, no doubt, made great progress since ; but in 
the process, it has lost all its distinctive features, and there 
can, I apprehend, be no better proof of this than the fact mortgage. 
that, according to the law, as administered in Bengal and 
the North- Western Provinces, at any rate, the respective 
rights of mortgagor and mortgagee are the same, whether 
the parties are Hindus or Mahommedans. The process Gradual 
which Mahommedan law underwent in India may be des- assimilation 
cribed as one of radual assimilation to the Hindu law. 7aw. 






44 LAW OF MORTGAGE. 

LECTURE There is one feature of Mahoininedan law which distin- 

II.- guishes it as well from the Hindu as from the English law. 

Cont(L We saw that, in both the latter systems, the ownership of 

Difference the property mortgaged is liable to pass to the creditor on 

ftfhon" * ne ^ a ^ ure f the debtor to repay the loan by the appoint- 

medaTlaw ed time. The transfer is the result of the agreement of 

and Hindu t j ie p ar kj eSj by w hieh the debtor renounces his right to 

lisk i&w~ the pledge upon default. In the Roman law, however, 

we found that another kind of security was invented at 

a very early period, by which the possession only was 

transferred to the creditor. This kind of security, as I 

told you, had a very great fortune in Roman law. It 

displaced the older form of mortgage, and the respective 

rights and duties of the pledger aud pledgee were moulded 

on principles altogether different from those which have 

obtained in systems in which a conditional transfer of 

ownership is the recognized mode of giving security. In 

the later Roman law, as you know, the ownership never 

passed to the creditor on the default of the debtor ; the 

mortgagee was only authorized to sell the pledge and 

satisfy his debt out of the proceeds. Now the pledge of 

Analogy the strict Mahommedau law resembles very closely the 

between Piomus of the civil law. The creditor is not permitted 

Mahomme- , , ,, /. ,1 , j -o- i 7 

dan law and to become the owner of the pledge. His right is con- 

Komaniaw. fined, with certain limitations which I shall presently 

notice, to the sale of the pledge, when, if there is a 

surplus, the debtor becomes entitled to it. It is true 

that the iugenuity of Mahomrnedan lawyers soon invented 

another kind of security, analogous to the Fiducia of the 

Roman and the mortgage of the English law. But there 

cannot be the shadow of a doubt, that the early Mahom- 

medan law did not recognize any other kind of security 

than the Rahn, to which I now propose to address myself. 

A pledge in Mahommedan law, as signified by its name 

(Rahn), is defined in the Heclaya as "the detention of a thing 

on account of a claim which may be answered by means 

of that thing, as in the case of debts." (Hamilton's Hedaya, 

whether Vol. IV, p. 189.) There is a good deal of discussion in 

piedgemust the Mahommedau books as to the necessity of possession 

panied 0m by * ^ ne validity of a pledge, but the weight of authority 

possession, seems to be in favour of the position that a pledge is 

not valid unless it is accompanied by possession. It 

is said in the Hedaya that "until the seizin actually 

take place, the pawnor is at full liberty either to adhere 



ARCHAIC NOTIONS OF PLEDGE. 45 

to, or recede from, the agreement, as the validity of it LECTURE 
rests entirely upon the seizin, without which the end Jfe"i 

and intention of a pledge cannot be answered." (Hamilton's ' 

Hedaya, Vol. IV, p. 190.) In these words you cannot fail 
to perceive the very same primitive notions which are 
traceable in early Hindu and Roman jurisprudence. It is 
also clear that the Mahommedan law had not ceased to be 
under the dominion of archaic notions when the Hedaya Conflict- 
was compiled. The conflicting dicta, however, which are |"|[ 8 p f 1 M a _ 
collected by the author, show that the process of eman- hommedan 
cipation had already commenced, and, it may be presumed, law y ers - 
was accelerated in some measure by the Hindu law, with 
which it came into contact in India. 

Possession being thus essential to the validity of a 
pledge, it followed as a corollary, that things of which 
there could be no delivery of possession according to Ma- 
hommedan notions, could not be given in pledge. Thus, Things 
an undivided share in any property, whether moveable or ^^j^ 6 
immoveable, could not be lawfully pledged. One eminent cannot be 
Mahommedan lawyer, indeed, who seems to have enter- 
taiued more advanced notions on the subject, maintains a 
contrary opinion ; but the weight of authority is opposed 
to his view. The discussion on this point in the Hedaya 
discloses a conflict between archaic notions and modern 
ideas, which is extremely interesting. 

"It is unlawful," says the author of the Hedaya, " to pawn 
an indefinite part of anything. Shafei maintains that it is 
lawful. On behalf of our doctors, two reasons are urged : 
First, this disagreement arises from the difference of opinion 
regarding the object of pledges; for, according to us, pledges 
are taken to be detained, with a vie^o to obtain payment 
of a debt, which cannot be effected in case the pledge be an 
undefined part of property; because a seizin of things of that 
nature cannot be made, a real seizin being only practicable 
with respect to things which are defined and distinguished 
whereas, according to Shafei, the object of pledges is that 
the pawnee may sell them to effect a discharge of his debt ; and 
with this object, pledges of the nature above mentioned 
are not in any shape inconsistent. Secondly, it is an 
essential part of the contract of pawn, that the pledge 
be constantly detained in the hands of the pawnee until 
the redemption of it by the pawnor a condition which 
cannot be fulfilled with respect to pledges of - the above 

. _/* T * 111 l 1 ca 

nature ; for, in such cases, it would be necessary that the validity of 



46 LAW OF MORTGAGE. 

LECTTTEE pawnor and the pawnee have possession of the article alfcer- 

IL nately, whence it would be the same as if the pawnor were 

Contd - to say to the pawnee, 'I pawn it to you every other 

pledge in day ; ' as, therefore, a constant detention is in such case 

d^n'Taw 16 " impossible, ifc follows that the pledge of an undefined 

part of anything, whether capable of division or incapa- 

Pawnee ble, is illegal." (Hamilton's Hedaya, Vol. IV, p. 203.) A 

p*ed"e"to ie wa 7> however, was ultimately found out of the difficulty 

the pawnor. created by the necessity of detaining the pledge, and the 

restriction might be evaded, in the later Mahommedan 

law, by the fiction of the pawnee lending the pledge, 

which he was at liberty to do, to the pawnor. The pledge, 

however, might be resumed at any moment by the pawnee, 

while the loan did not put an end to the pawn. (Hamilton's 

Hedaya, Vol. IV, p. 244.) 

Seizin not it j s important to observe that, under the Maliki law, 

necessary . . . J , ^ , .., ~ , , 

in the Ma- seizin is not necessary. Contact with foreign peoples and 
Hki law. foreign institutions could not long fail to do their work of 
disintegration. As truly observed by Mr. Ameer AH, " the 
grand superstructure of Islamic jurisprudence is founded 
on the Koranic laws and the traditional sayings of the 
prophet, but much of the coping stone was supplied at 
Bagdad, in Syria, in Andalusia and Persia," and, the learned 
professor might have added, in India. (Tagore Law Lec- 
tures, 1884, p. 4.) But the building, although representing 
different styles of architecture, is, on the whole, if some- 
what wanting in grace and symmetry, not altogether 
deficient in solidity, nor absolutely inharmonious in its 
parts. 

redemption "^ seems ^ na ^ an equity of redemption cannot strictly be 
cannot be the subject of a gift in Mahommedan law, because posses- 
sion keing ess ential to the validity of a pledge, there can 
be no delivery of seizin to the donee, without which the 
gift would be incomplete. Thus, in the Fatawa-i-Alamgiri 
(Vol. Ill, p. 521), it is said that if the property be in the 
hands of a pledgee, the gift is not lawful for want of posses- 
sion. As pointed out by Macnaghten, the reason of the rule 
is, that seizin and delivery cannot be effected when the thing 
is not in the possession of the donor. " It is of no consequence 
how the possession has been parted with, even though the 
proprietary right be expressly retained or claimed as in the 
case of a pledge or of an usurpation." (Note to Macnagh ten's 
Precedents of Gifts Cases, No. 6, and the opinion of the 
Mahommedan Law Officer. See also Mohinudin v. Man- 



RIGHTS OF PLEDQOR AND PLEDGEE. 47 

sherskah, 1. L. R., VI Bom., 650.) This rule, however, has LECTURE 
fallen into disuse with the reason for it, since hypothecation JF'T^ 

was engrafted on the older Mahommedan law. If the ' 

property, therefore, be not in the possession of the mort- 
gagee, as frequently occurs in practice at the present day, 
the objection does not apply and a valid gift or dedication, 
in which also delivery of possession is essential, may be 
made by the mortgagor, of his equity of redemption. 
(Shahzadee Hazra Begum v. Khaja Hussain All Khan, 
XII Suth. W. R., 498 ; IV Ben. L. Rep., A. C. J., 86.) 
As I have already observed, this restriction never applied 
to a sale of the equity of redemption in which seizin is 
not essential, although there is a very peculiar rule in the 
Mahommedan law relating to priority in the case of two 
successive sales by the mortgagor of his property. 

It may, however, be doubted whether the view that a TI e HanaQ 
gift of the equity of redemption is invalid is not founded aw * 
upon a narrow construction of the Hanafi law. It is 
clear that in the case of a hoivalat the debt may be trans- 
ferred from the original debtor to a third person, and if 
such debt happens to be secured by a pledge, the person 
who discharges the debt would seem to be entitled to the 
pledge. The passage in the Fatawa Alamgiri, to which I 
have already referred and which is generally cited as an 
authority for the proposition that the gift of an equity of 
redemption is unlawful, may perhaps be read not as abso- 
lutely prohibiting a donation, but only as negativing the 
right of the donee to actual possession in derogation of the 
rights of the mortgagee under his mortgage. (See the 
observations of Mr. Ameer Ali in the Tagore Law Lectures, 
1884, pp. 69 70, where the learned author points out 
the analogy between a gift of a reversion and one of an 
equity of redemption.) 

I shall now proceed to consider the respective rights of Rights of 
the pledger and pledgee in Mahommedan law. I propose thepledgee ' 
to place before you only a rough outline, as the details 
cannot be said to possess much interest. The pledgee had 
the right to sell the pledge on the default of the debtor, 
but only when the right was given by the contract itself. 
He was then regarded as the agent of the debtor, but 
the authority, upon principles recognized in every system Power of 
of law, was not revocable. It was not necessary that the 
authority should be given to the creditor himself. It law. 
might, at the option of the party, be given to a third 



48 LAW OF MORTGAGE. 

LECTURE person who could be compelled by the Court to exercise 
\ L ~ the power. A sale, however, by actual judicial process, 
Contd. seemg to i iave been unknown, and the Kazi could only 
compel a person who had been invested with the power 
of sale to exercise it for the benefit of the creditor. If 
the power of sale was not given by the original contract, 
the pledgee had only a bare lien, without the right of 
getting material satisfaction out of the pledge. In the 
Rights of Mahommedan law, the debtor was not authorized to deal 
pledger. j n an y way ^ifa th e property pledged by him ; and a 
sale without the consent of the creditor was invalid. If, 
notwithstanding, the debtor sold the property to two per- 
sons in succession, the person who was recognized as the 
purchaser by the pledgee, acquired a preferable right to 
the property, although the sale to him might be posterior 
in point of time. 

The rule of the Mahommedan law regarding the liabi- 
lity of the pledgee for the destruction of the pledge 
even when the destruction is accidental, is somewhat 
peculiar. It is thus stated by Macnaghten: "Where 
such property, being equivalent to the debt, may have 
been destroyed otherwise than by the act of the pawnee 
Conse- or mortgagee, the debt is extinguished ; where it exceeds 
quences of ] ie (j eD ^ the pawnee or mortgagee is not responsible for 
pledge. the excess ; but where it falls short of the debt, the defi- 
ciency must be made up by the pawnor or mortgagor : 
but if the property were wilfully destroyed by the act of 
the pawnee or mortgagee, he will be responsible for any 
excess of its value beyond the amount of the debt." 
(Macnagh ten's Mahommedan Law, Chap. XI, 19.) 

There are one or two other points which deserve notice. 
The pledgee was not permitted to enjoy the usufruct of 
the property pledged to him, but he was not chargeable 
with the expense of providing for the support of the 
Liability of pledge, although he was bound to provide for its custody, 
connected " ^ * s * ^ e observed," says the author of the Hedaya, 
with the " that the wants of a pledge are of two kinds : (1) such as 
and t0d re- are re( l u i s ^e towards the support of the pledge and the 
servation continuance of its existence ; (2) such as may be necessary 
of pledge, towards its preservation or safety, whether wholly or 
partly. Now, as the absolute property of the pledge apper- 
tains to the pawner, the expenses of the first class must, 
therefore, be defrayed by him ; and as he has, moreover, a 
property in the usufruct of the pledge, its support and the 



PLEDGE FOR CONTINGENT DEBT. 49 

continuance of its existence, for this reason also, rest upon LECTDHK 
him, being an expense attendant upon his property, in Jf 1 ^ 

the same manner as holds in the case of a trust. Of this ' 

class, are the maintenance of a pledge in meat and drink, 
including wages to shepherds, and so forth ; and the cloth- 
ing of a slave, the" wages of a nurse for the child of a 
pledge, the watering of a garden, the grafting of fig trees, 
the collecting of fruits, &c. The expenses of the second 
class, on the contrary, are incumbent on the pawnee ; 
because it is his part to detain the pledge ; and, as the 
preservation of it, therefore, rests upon him, he is conse- 
quently to defray the expense of such preservation. Of 
the second class is the hire of the keeper of the pledge ; 
and so likewise the rent of the house, wherein the pledge 
is deposited, whether the debt exceed or fall short of the 
value of the pledge.'" (Hamilton's Hedaya, Vol. IV, 
pp. 200-201.) But any taxes or tithes, due on account of the 
pledged property, must be paid by the pledger as payments 
necessary towards the subsistence of the property. (Hamil- 
ton's Hedaya, Vol. IV, p. 202.) 

A pledge cannot be given as a security against contin- Pledge 
gencies. Thus, a pledge deposited with a person, as a 1111 ! 8 ' 1 " 3 
security for anything which may be due in future, is invalid ; a n existing 
" although," adds the Hedaya, " it is otherwise in the case debt - 
of a promised debt, as, where a person gives a pledge to 
another on the strength of his promising to lend him one 
thousand dirhems, and the other takes the pledge and pro- 
mises to lend the money, and the pledge perishes in his 
hands ; for, in this case, he is responsible in proportion to 
the sum promised, in the same manner as if it had been 
actually paid, the promise of debt being considered as an 
actual existence of it, for this reason that it was made at 
the earnest desire of the borrower." (Hamilton's Hedaya, 
Vol. IV, pp. 208-209.) In a case, in which a Mahommedan 
vendor had deposited with the vendee the title-deeds of a 
certain estate, as a security for his delivering up to the 
vendee the title-deeds of the property which had been sold 
to him, and which were not at the time in the possession 
of the vendor, Lord Kingsdowii observed : " By the 
Mahommedan law, such a contract as the one under consi- 
deration, for a security in respect of a contingent loss, 
would be one, not of pawn, but of trust." (Varden Seth 
Sam v. Lulqmtty Royjec, Lalla, IX Moore. Ind. App., 
320.) 

K. B. G., M. 4 



50 LAW OF MORTGAGE. 

LECTURE It seems that in the Mahommedan law a pledgee is bound 

ll -~~, to produce the pledge, as well on receiving a partial pay- 

' ment, as in the case of a complete discharge, because, as 

Pledgee the doctors say, the pledgee's producing the pawn is of no 

b roduce prejudice to him, while, at the same time, it serves to dissi- 

the pledge pate any apprehension of the loss of the pledge which 

on receiv- ma have arisen in the mind of the pawner. (Hamilton's 

ingapartial J - irt c\ 

payment. Hedaya, Vol. IV, p. 196.) 

Destruc- If a pawner destroy the thing he has pledged, the 
pledge tbe P awnee ma y demand a fresh pledge ; but if a stranger (that 
is, a person unconcerned in the contract) destroy the pledge, 
the pawnee (not the pawner) is litigant against him, and 
may take from him a compensation for the value, which he 
must retain in pawn in place of the original pledge ; for 
the pawnee, as being the most entitled to the substance of 
the pledge, is also most entitled to its substitute, namely, 
the value. (Hamilton's Hedaya, Vol. IV, p. 243.) 
increase It is important to observe that every species of increase 
froin U the accruing from a pledge after the execution of the contract 
pledge. (such as milk, fruits, wool, or progeny), belongs to the 
pawner as being an accession to his property, -but they 
are, nevertheless, detained with the original in pawn ; 
for " branches are dependant on the stock ; and the con- 
tract of pawn, being of a binding nature, extends over all 
its branches." (Hamilton's Hedaya, Vol. IV, p. 263.) 

We have seen that the pledgee did not possess, in the 
Mahommedan law, an unqualified power of sale ; and the 
reason why no improvement took place in this respect is 
Causes of not far to seek. The Mahommedan law prohibited the 
lopment of taking of interest as unlawful, and this rule must have 
Mahomme- seriously retarded the development of the law of pledge, 
dan law. ^y e gaw j low common f a i rne ss suggested in Hindu law the 
rule by which the debtor was bound to redeem before 
the interest became equal to the principal. But no such 
liability was imposed upon the Mahommedan debtor, be- 
cause the pledge was thought to be a sufficient security 
for the loan, and, as the debt could not receive any acces- 
sion, the creditor did not run any serious risk of losing 
his money. The prohibition, however, relating to interest, 
led to the invention of the bye-bil-wufa, a kind of 
security, analogous to the English mortgage, and possessing 
a very interesting history. 

The Mahommedan creditor, being prohibited by law from 
taking interest, devised a mode of evadin<? this restriction 



ORIGIN OF BYE-BIL-WUFAS. 51 

under color of a sale with a clause for re-purchase. Such a 
condition was perhaps strictly legal; but Mahommedan LECTURE 
lawyers were slow to recognise a transaction which wore II. 
only the semblance of a sale, but was, in reality, a loan Contd. 
repayable with interest. The lender, by stipulating for origin of 
a higher price on the re-sale, or, by receiving the rents bye-bii- 
and profits, substantially derived the same advantage, as if w ' 
the money had been placed at interest, while the transac- 
tion in form did not violate the law. (Per Turner, C. J., 
in Rama S'ami Sastrigal v. Samiyappanayakan, I. L. R., 
IV Mad., 179.) You will find the conflicting opinions of 
some of the most eminent Mahommedan Iaw3 7 ers on the 
point collected in Baillie's Treatise on Sales. (See Baillie 
on the Mahommedau Law of Sale, pp. 301-302.) These 
conflicting dicta reveal the same conflict between archaic 
conceptions consecrated by religious sanction and modern 
economical ideas, that took place in mediaeval Europe. 
The struggle was long and arduous, but the issue could 
not have been dubious for a moment. The prejudice 
against usury, although clothed with the terrors of religion, 
gradually gave way among Mahommedans, as it did among 
the followers of other creeds, to the practical necessities 
of society and the teachings of political economy, long 
before they were either perceived with clearness or for- 
mulated with precision. 

" It is to be observed," says the author of the Hedaya, Validity of 
" that some consider a wufa sale to be invalid, in the same awufasale - 
manner as a compelled sale, and apply to it the rules of 
sale by compulsion; whence (according to them) if the 
purchaser in a wufa sale, sell the article purchased, the 
sale so made by him may be broken through, as the in- 
validity of the sale, in this case, is on account of the non- 
consent of the seller, in the same manner as in a case of 
compulsion. Wufa sale is where the seller says to the 
purchaser : " I sell you this article, in lieu of the debt I 
owe you, in this way, that upon my paying the debt, the 
article is mine." Some determine this to be, in fact, a 
contract of pawn, for between it and pawn there is no 
manner of difference, as, although the parties denominate 
it a sale, still the intention is in effect a pawn. Now, in 
all acts, regard is paid to the spirit and intention ; and 
the spirit and intention of pawn exist in this instance- 
whence it is, that the seller is at liberty to resume the 
article from the purchaser upon paying his debt to him 



52 



LA.W OF MORTGAGE. 



LECTURE 
II. 

Could. 



Futwa, or 
opinion, 
delivered 
by Mahom- 
inediin law- 
officers. 



Some, again, consider a wufa sale to be utterly null, as 
the purchaser, in the case in question, resembles a person 
in jest, since he (like a jester) repeats the words of sale, 
at the time that the effect and purpose for sale are not 
within his design. Such sale is, therefore, utterly null and 
void, in the same manner as a sale made in jest. The 
Hanafite doctors of Samarcand, on the other hand, hold 
a wufa sale to be both valid and useful, as it is a- species 
of sale commonly practised from necessity and convenience, 
and is attended with advantage in regard to some effects 
of sale, such as the use of the article, although the pur- 
chaser cannot lawfully dispose of it." (Hamilton's Hedaya, 
Vol. Ill, pp. 455-50) (a). 

The question of the validity of bye-bil-wufas seems 
to have been raised in a very early case in the 
Sudder Dewany Adawlut, when the Mahommedan Law- 
officers, who were consulted, gave the following opi- 
nion : " In the deed, there is first stipulated an abso- 
lute sale ; afterwards, at the end of it, it is additionally 
stipulated, that, if the seller shall repay the purchase- 
money within a year, the sale shall become void. The 
author of the Buhr-i-rayik says such a condition is illegal, 
except it be for three days only, according to Hanifa 
and Abu Yusuf ; but, according to Mohammed, it is legal, 
without restriction, as a sherti-khiar, or optional con- 
dition." (Meer Aleem Ullah v. Alif Khan, I. Macnagh- 
ten's Sel. Rep., 73 ; cf. p. 76.) In a note to the case in 
which the above opinion was given, Mr. Macnaghten adds: 
"In the cause ' Busunt Ali v. Ram Coomar,' decided by 
the Sudder Dewany Adawlut, on the 4th of January 1799, 
there was a question put to the law-officers respecting 
the legality of bye-bil-wufa sales (6), though the cause, as 
it happened, went oft on a question as to the competency 
of the agent who made the bye-bil-wufa sale in that in- 
stance on the part of- another. * It was stated in the futwa 
then given,that a sale, with optional condition for three days, 
is good; but for more than three days is not good, accord- 
ing to Hanifa and Yusuf; but according to Mahommed, 

(a) " The bye-bil-wufa is called in the Hedaya, Moontad, which means 
practised or accustomed, viz., iu Samarcaud and neighbourhood as 
explained in the Kifayah, Vol. Ill, page 820." (Baillie's Mahoinmedau 
Law of Sale, p. 303, note.) 

(b) Wufa means the performance of a promise ; and bye-bil-wufa 
is a sale with a promise to be performed. 



GRADUAL FUSION OF HINDU AND MAHOMMEDAN LAW. 53 

for four days, or even a longer period, is good : that the LECTURE 
sort of sale being prevalent in the country, Mohammed's ;F'TT 

opinion should be followed. The intention of the parties, ' 

as collected from the tenor of the deed, shows whether 
the bye-bil-wufa be a sale with the reserve of an option 
of retractation within a limited time, or a mortgage for 
the security of money lent. A stipulation for a short 
period must be considered to mark that a sale was 
in the contemplation of the parties ; a long term denotes 
a mortgage, or security for a loan : and such mortgages, 
in the form of conditional sales, are very common, and 
rightly held valid under the opinion here cited." (I. 
Mamaghten's Sel. Rep., 77.) 

The bye-bil-wufa is, however, regarded only in the Bye-bii- 
light of a securit} 7 -, when any question arises as to its ^1*%' * 
real character, and the debtor is regarded as the owner, security, 
notwithstanding the sale with a condition. Mr. Baillie 
refers to a case mentioned in the futwa of Abul Fazal, 
in which a person was allowed to assert a right of 
pre-emption, notwithstanding that the ownership of the 
property, upon the foundation of which the right was 
claimed, had been transferred to another by a bye-bil- 
wufa. (Baillie's Mahommedan Law of Sale, p. 303.) 
This is no doubt a sensible view of the question, although 
it is extremely open to doubt whether bye-bil-wufas 
would have obtained any recognition in the Mahommedan 
law, if the transaction had not originally masked itself 
as a sale with a clause of re-purchase. 

I have now brought down the history of bye-bil-wufas 
down to a comparatively recent period. As you have 
already heard, the law relating to Rahn was also con- 
siderably modified in time, and hypothecation seems to 
have been common enough among the Mahommedans in 
this country, when the earlier Regulations on mortgages 
were enacted. It would seem that, by that time, the 
Hindu and Mahommedan law had been welded together, 
and the result was a mixed system, which has since 
been brought to the shape in which we find it, by the 
infusion of some of the doctrines of the English Court 
of Chancery. 

In concluding this account of what I may call the No dis- 
early and mediaeval Hindu and Mahommedan law of pledge, ^"^Jj, 
I wish to call your attention to the fact, that neither pledge 6 of 
of the two systems recognises any substantial distinction moveabies 



54 LAW OF MORTGAGE. 

LECTURE between a pledge of moveables and a pledge of land. A 
H- glance at some of the rules which we find in both these sys- 
_ terns will show that moveables alone were originally the 
and im- subjects of pledge, indeed, in the political and economic 
moveables. condition of ancient society, it could hardly have been other- 
wise. Land was of comparatively little value, while its 
alienation was watched with that excessive jealousy which 
forms such a striking feature in all systems of ancient law. 
The necessity of transferring the possession of the pledge to 
Tradition * ne creditor must also have proved a serious obstacle to land 
gradually being given as a security. I speak with reserve, but the 
disuse mt conjecture is plausible, that as land gradually increased in 
value, the rigor of the ancient rule was insensibly relaxed. 
The relaxation was probably, at first confined only to 
immoveable property, till, in course of time, it was extend- 
ed to moveables. It is thus that in the Eastern, as 
well as in the Western world, the " substantial pledge " 
becomes ultimately "refined into the invisible rights 
of the hypotheca." 



LECTURE III. 



Different kinds of mortgage Three principal kinds of conrentional mortgages- 
Simple mortgage Mortgage by conditional sale Usufructuary mortgage 
Local mortgages Mortgage how created Writing not essential Oral agree- 
ments valid in Hindu and Miihommedan law Parol mortgages invalid in 
English law, but valid here, though the effect of the Indian Registration Act 
is to give preference to registered instruments Two aspects of a mortgage 
Debt secured by mortgage on a bond how to be sold in execution Mortgagee's 
interest, under English law, merely that of a security Specific performance of 
a mortgage not always allowed Conflict of laws Mortgage of immoveable 
property governed by the lex rei sitce This rule not recognised by the 
French Code Parol mortgage accompanied by possession protected by 
the Registration Act, but constructive possession not sufficient Admis- 
sibility of parol evidence discussed Kassinath Chatterfee v. Chundy 
Churn Banerfee For qualifying the terms of a written instrument, parol 
evidence inadmissible Parol evidence of "agreement," and of "acts" and 
" conduct " No real distinction between thetwo Provisions of the Evidence 
Act on the point Authorities for and against the admissibility of parol evi- 
dence of ' ; acts "and "conduct" Parol defeasances ought to be held in- 
admissible Parol evidence when admissible in case of fraud or mistake 
Justice Melvill's judgment True rule on the point formulated in the Specific 
Relief Act History of English law on the point Taltarum's Case Judges 
usurping the functions of the legislature and relaxing the Statute of Frauds 
Two kinds of consensual mortgages, express and implied Mortgage by 
deposit of title-deeds Equitable mortgage in English law, as opposed to a 
legal mortgage Equitable mortgage in the mofussil Equitable mortgagee 
has only a decree for sale in the mofussil, but may foreclose in the original 
jurisdiction of the High Court Mortgage implied by delivery of the title- 
deeds, and, if further accompanied by an agreement, to create a charge: the 
transaction is an express conventional mortgage Varden Seth Sam's Case 
Growth of equitable mortgage in England Memorandums, true natnreof 
Mortgage of the equity of redemption is an equitable mortgage Registra- 
tion Equitable mortgage in England, how created Mortgage of future 
crops What cannot be the subject of mortgage The expression " equitable 
mortgage" not properly applicable to a transaction between natives of this 
country Defence of purchase for value without notice Equitable defence 
not available here In case of wilful neglect or fraud, such defence available 
Durga Prosad, v. Shumbu Nath Memorandum not the contract between the 
parties, but simply an evidence of the deposit of the title-deeds Kedernath 
Dull, v. Sham Lull Khettry Bombay cases on the point Summary of 
decisions Registration of memorandum not necessary Equitable mortgage 
not an oral agreement within the meaning of the Registration Act Proper 
subjects of mortgage General hypothecation invalid Accidental destruc- 
tion of object of pledge Capacity to mortgage Rights of a trustee with 
limited powers Persons under disability incapable of creating a mortgage 
Case of a minor Rights of guardian Accessions to pledge Mortgagee's 
right to the accessions on ly a qualified right Leading case on the point, 
Rajah Kishendatt v. Raja Mumtaz Ali Mortgagor having defective title 
bound to make good mortgage out of property subsequently acquired Right 
of the mortgagee, being in the nature of a right to claim specific performance, 
plea of purchase for value without notice is a good defence Frauds by the 
mortgagor and mortgagee Doctrine of estoppel Right of the mortgagee 
does not extend to things not pledged to him Rights of mortgagor and 



5G LAW OF MORTGAGE. 

LECTURE mortgagee when pledge assumes a new form Byjnath Lai v. Ramdin Chow- 
TTT dry Mortgagee not a party to a suit for partition of mortgaged joint family 

property Mortgage of joint estate in Roman law Mortgagee not estopped 
by a previous judgment Bonomaliy Nag's Case Question of estoppel 
discussed in Siluram v. Amir Begum Resjudicata Mortgagee when bound 
by the acts of the mortgagor Kightsof the mortgagee Mortgagee entitled 
to detain title-deeds, and mortgagor to inspect them at all reasonable times 
Liability of the mortgagee of a lease-hold for rent Mortgage of a whole 
term in English law Power of sale in mofussil mortgages Validity of 
power of sale discussed Bhowani Churn Mitter's Case Power of sale not 
allowed in the French Code. 

Different IN the present course of lectures, I shall adhere to the 
mortgage, classification of securities which we found in the Roman 
law. Following that classification, I purpose in this lecture 
to make a few general observations upon the various kinds 
of conventional or contractual mortgages in use in India 
at the present day. From what I have already said, you 
must have seen that a creditor possessing a security may 
have, either a right to sell the property mortgaged to him, 
or, he may become the absolute owner of the property, on 
the default of the mortgagor to repay the money lent to 
Three prin- him. In the first case, the creditor is not entitled to any- 
of P mort llldS thing in excess of the debt and costs. In the second case, 
gages. the creditor becomes entitled to the property, whatever 
may be its value. In either case, however, the creditor is 
wholly independent of the debtor. But, there is another 
mode in which property may be given as a security, and that 
is by letting the creditor into possession, and permitting him 
to repay himself out of the rents and profits. Thus, we 
have three different kinds of securities, all of which are 
to be found in India. The first is called a simple mort- 
gage ; the second, a conditional sale ; and the third, an 
usufructuary mortgage. It is true, they may be some- 
times found in combination, thus giving rise to a greater 
variety; but, the three I have just mentioned are, what I 
may call, the primary divisions of Indian mortgages (a). 
I shall discuss hereafter the various rights and liabilities 
created by each of these three kinds of mortgages, and will 
now only state the different modes in which conventional or 
contractual mortgages may be created, and the formalities 
which it is necessary to observe, ending with a few general 
observations on this class of securities. 

Oral agree- We must remember that neither the Hindu nor the 
ments valid Mahohimedan law requires writing for the validity of any 

(a) In addition to the above there are various kinds of local mortgages 
prevailing in different parts of the country. For a short account of 
these mortgages, see Appendix I. 



PAROL MORTGAGES. 57 

transaction, however solemn. " Contracts of every, descrip- LECTURE 
tion, involving both temporal and spiritual consequences, 
may be made orally." (Per Holloway, J., in Srinivasam- . 
mat v. Vijayammal, II Mad. H. C. Rep., 37.) It is true and Ma 
that writing is often enjoined, particularly by Hindu hommedan 
lawyers, and preference, as we have seen, is sometimes law ' 
given to a transaction evidenced by writing over a parol 
contract or transfer. But the fact remains that in no ' 
instance is writing absolutely necessary by law (6). Among 
Englishmen, however, who can only convey by deed, a 
parol mortgage is invalid at law. We shall, however, 
presently see that the strict rule of law has been relaxed 
in favour of a class of securities, known as equitable 
mortgages in the English law because they are only 
recognised by the Court of Chancery. Among Hindus and 
Mahommedans, however, a parol mortgage is just as good 
as a mortgage reduced to writing. This rule of Hindu and p aro imort- 
Mahommedan law has been left untouched by the legis- gage even 
lature, notwithstanding the introduction of a very stringent now va ! ' 
system of registration (c). In practice, however, mort- 
gages are almost invariably reduced to writing ; and the 
language of the earlier Regulations shows that the practice 
is by no means of recent growth. In conditional sales, 
however, parol defeasances are not uncommon, although in 
recent years, they have become much less frequent than 
before. But it must not be understood, that a verbal 
mortgage stands in all respects in the same favourable situ- 
ation as a written mortgage which has been registered. The p re f erence 
Indian Registration Acts, although they do not insist upon to register- 
the necessity of a written instrument, when the laws of the ed instru - 
country do not require that the transaction should be 
evidenced by writing, give, as a rule, preference to regis- 
tered instruments over mere parol agreements or decla- Indian Re- 
rations. Section 48 of the present Registration Act says : gistration 
" All non-testamentary documents duly registered under 
this Act, and relating to any property whether moveable or 

(Z) If, however, a mortgage is reduced to writing, any material alter- 
ation in the instrument without the consent of the party affected by 
such alteration, will render the document void ATohesk Chunder Cliatter- 
jee v. Kaminy Knmari Deli, I. L. R., XII Calc., 313 ; I. L. R., X Bom., 
487.; I. L. R., IX Mad., 399. As to what constitutes material alteration, 
see I. L. R., XII Calc., 313. and the cases cited therein ; but see I. L. R., 
VII Bom., 418. 

(c) But see the provisions of the Transfer of Property Act, which 
came into operation on the 1st July 1882; the Act, however, does not 
extend to the whole of the country. 



58 LAW OF MORTGAOK. 

LECTURE immoveable, shall take effect against any oral agreement 
m - or declaration relating to such property, unless where the 
agreement or declaration has been accompanied or followed 
by delivery of possession." 

Meaning of The section is not very happily worded, and the meaning 
"nent 6 "" f the words "agreement" and "declaration," which have 
been reproduced from the older Acts, has given rise 
to some discussion. There can be no doubt, however, 
as explained by Mr. Justice Markby in Salim Sheik v. 
Bydanath Ghuttuk, that the word " agreement " in the Act 
is not intended to be used merely in the sense of what 
English lawyers call an executory agreement, but that it 
embraces conveyances as well as contracts. (XII Suth, 
W. R., 217. See Holland's Jurisprudence, p. 209, where 
the ambiguity lurking in the term agreement in the English 
law is clearly pointed out.) 

Two as- In connection with the subject of registration, it is import- 
mort a f an ^ ^ ODserve that a mortgage may be viewed in two different 
aspects. It is a contract creating a personal right, in so far 
as the promise of the debtor to repay the loan is concerned. 
But it is also a conveyance, in so far as it passes to the 
creditor a real right in the property, which is charged 
with the repayment of the money. Now, a real right, as I 
have already explained to you, is never conferred by a mere 
contract ; but a mortgage is looked upon so much as a mere 
contract that it is precisely one of those transactions in 
which we are most likely to confound a contract with a 
conveyance. I shall show hereafter the importance of this 
distinction which seems to have been overlooked in some 
of the cases in the books, and in which a hypothecation has 
been regarded merely in the light of a right in personam. 

In some cases, however, the Court seems to have gone to 
Sale of <\ the opposite extreme. It has been held, for instance, that 
dei.t se- a debt which is secured by a mortgage on a bond, cannot be 
mortage- so ^ under our Code of Civil Procedure according to the rules 
bond. regulating the sale of moveable property. Section 266 of the 
Code does, indeed, speak of bonds and other securities for 
money, but the Court still seemsto have thought that the case 
of a mortgage-debt is not expressly provided for by the Civil 
Procedure Code, and, that, as a mortgage is not merely a debt, 
but represents a substantial interest in the mortgaged pro- 
perty, that is the right of selling it under certain conditions 
for realisation of the debt, the latter cannot be sold apart 
from the security, and that, in such cases, there should be an 



SPECIFIC PERFORMANCE OF MORTGAGES. 59 

attachment under section 274 as well as under section 26G LKCTURE 
of the Civil Procedure Code, a rather complex proceeding, 
which could scarcely have been in the contemplation of 
the Legislature. I should have thought that, as in other 
systems of law, a sale of the debt would necessarily carry 
with it as an incident the lien of the judgment-debtor, and 
that section 266 of the Code of Civil Procedure was wide 
enough to include a debt secured by a mortgage. (JDebendro 
Kumar Mandel, v. Ruplall Das, I. L. R., XII Calc., 546. 
But see Srinath Dutt v. Gopal Chunder Mittra., I. L. R., 
IX. Calc., 511 ; Bhawani Kumar v. Gulab Rai., I. L. R., 
I, All., 348 ; and Appasami v. Scott, L L. R., IX. Mad., 5 
I. L. R., X Mad., 169.) 

It maj', perhaps, be useful to mention here that in Mortga- 
England, whatever may be the form of the mortgage, f^fn'sng- 
it is for all practical purposes regarded as personal pro- iSsh law 
perty. Thus on the death of the mortgagee, the security, "l erel y that 

i / oo 7 /' oj a sccur 

whether the mortgage is of a freehold estate or not, becomes ity. 
vested in his personal representatives. But if the mort- 
gage is foreclosed during the lifetime of the mortgagee 
so as to be converted into real estate, it goes to the heir- 
at-law, although in a case where the mortgage becomes 
irredeemable for the first time in the hands of the latter 
by foreclosure or otherwise, he will be regarded only as a 
trustee for the executor. (Williams on Executors, pp. 693-4. 
But see Sham Narain Singh v. Raghubar Dyal, I. Cal. 
L. Rep. 343; I. L. R., III. Calc., 508.) 

But, although a mortgage creates an interest in rem, a Specific 
mere agreement to borrow or to lend a sum of money P erfor - 
on mortgage, will not be specifically enforced. (Rogers * 

v. Challis, 29 L. J. Ch., 240 ; 27 Beav., 175 ; Anakaran 
Kasim,v. Saidamadath Avulla, I. L. R., II Mad., 79.) If a 
person, however, agrees to execute a mortgage in considera- 
tion of money actually due by him, he may be compelled to 
perform his agreement. (AsJdon v. Corrigan, 13 L. R., Eq., 
76 ; 41 L. J. Ch., 96 ; see also Hermann v. Hodges, 16 L. R., 
Eq, 18 ; 43 L. J. Ch., 192; 21. W. R, 571.) A doubt has, 
indeed, been expressed in some cases whether a mere agree- 
ment to give a mortgage for a past debt unaccompanied by 
any express stipulation for forbearance can be enforced, but 
the doubt rests upon considerations wholly foreign to the 
present topic, and nee'l not, therefore, be discussed in this 
place. (See Crofts v. Fenge 4 Ir. Ch. Rep. 316 ; Woodro/e 
v. Johnston 4, Ir. Ch. Rep. 319.) 



CO LAW OF MORTGAGE. 

LECTURE The peculiar nature of a mortgage transaction operating, 
nl - as it does in rem, has also given rise to some discussion in 
Con fli ct ' O f connection with the subject of conflict of laws. It is, per- 
laws. haps, not very easy to extract a clear and consistent rule 
from the mass of controversial writing in which the ques- 
tion has got entangled, but the better opinion seems to be, 
that the validity of the transaction, in so far as it affects 
immoveable property, will be governed by the lex rei 
sitce, and the fact that both the parties are domiciled in 
a foreign country, will not make any difference. It seems 
that the formalities of the contract will also be regulated 
by the same law. A distinction has, indeed, been suggested 
between a con tract and a conveyance between an agreement 
to mortgage for instance, and a perfected mortgage ; but 
the weight of authority is not in favour of such niceties. 
And a mortgage not executed in conformity with the 
law of the country in which the land is situated, would 
not, therefore, create any obligation to execute a formal 
mortgage according to the lex rei sitce, although a different 
view has been advanced by some eminent lawyers (d). 
(Story's Conflict of Laws, pp. 610 611, aud the authorities 
cited therein.) 

Difficulties have also been sometimes felt in determining 
the forum in which mortgages should be enforced, as also 
in ascertaining the law of prescription which should regu- 
late the right of a mortgagee to enforce his security ; 
but I reserve these questions for discussion in the next 
lecture. 

ftegistra- As a mortgage creates an interest in land it must, where 

tiou when the debt secured by the mortgage is not less than 100 rupees, 

sar3 ' be registered (e). The provisions of the Indian Registration 

Act are very stringent, but it must be remembered that, for 

the purposes of registration, the principal alone is taken 

into account. Again, in the case of an assignment of a 

mortgage, the necessity of registering the deed of transfer 

depends, not upon the amount due on the mortgage, but 

(<Z) The provisions of the French Code are. however, less liberal. 
Art. 2128 of that Code provides that "contracts made in a foreign 
country cannot give a mortgage upon property in France, unless there 
be stipulation contrary to this principle in the political laws, or in 
treaties." 

(f ) A charge of debts may be created by will, in which case registration 
ifi not necessary. As to what constitutes a charge of debts, see I. L. R., 
VII Calc., 772 ; and the English cases cited therein. Cf. I. L. R., 
IV Calc., 402 ; distinguish I. L. It., IX Calc., 406. 



CONSTRUCTIVE POSSESSION. Gl 

upon the amount for which the assignment is made. It LECTURE 
seems that if the assignment is unregistered, the debt will 
be transferred, but not the lien. (Koob Lull Chowdhry v. 
Nitya Nund Sing, I. L. R., IX Calc., 839 ; Oanpat Pan- 
durang, v. Adarji Dadabhai, I. L. R., Ill Bom., 312). 
But the question whether the assignment of the debt does 
not carry with it the lien of the creditor by operation of law, 
was not distinctly raised in these cases. If the lien is trans- 
ferred by operation of law, the assignee may fairly claim to 
avail himself of the security, notwithstanding the inadmis- 
sibility in evidence of the deed of assignment. (Surwan 
Hossein v. Golam Mahomed, IX. Suth. W. R., 170, F. B. ; 
Nadir Hossein v. Pearoo Thovildarinee XIX Suth. W. R., 
254). In this connection it may be mentioned, that the 
words, " any right, title, or interest, whether vested, or 
contingent to, or, in, immoveable property," may sometimes 
give rise to questions of considerable nicety where the 
interest created by the document is only an indirect one. 
Similar questions occasionally arise in England upon the 
Mortmain Act, which makes void all gifts of any interest 
in lands in favour of charities. It has been held in a 
recent case by the English Courts that a mortgage by 
persons of their interests under a settlement, the funds 
subject to which are invested on mortgage of land, confers 
an interest in land, and, cannot, therefore, be bequeathed 
to a charity. (In re Watts. Cornford v. Elliot, 27 Ch. D., 
318 ; S.C., on appeal, 29 Ch. D., 947.) It does not, however, 
necessarily follow that a similar construction will be placed 
ou the provisions of the Indian Registration Act (/). 

Before dismissing the subject of registration, I wish to Paroi 
make one observation. We find that a parol mortgage heifac- 
is protected, only when it is followed, or accompanied, by companies 
possession ; and the reason is, that the actual delivery s n p 8ses ~ 
of possession gives publicity to the transaction, and thus 
lessens the chances of fraud. It is upon this principle, that Construc- 
the Court has refused to extend the protection to a case tjveposses- 
in which a merely constructive possession is delivered to sllfildent 
a person already in actual possession, either as tenant und( r r the 
or under some other title. (Kirtee Chunder Haldar v. 
Raj Ckunder Haldar, XXII. Suth W. R., 273. See also 
Fury v. Smith, 1 Huds. and Bro., 735, a case under the 
Irish Registration Act. But see Palani v. Selambara, 

(f) See on the subject of registration generally, Appendix III, 
Statutes, tit. Registration 



62 LAW OF MORTGAGE. 

LECTURE T. L. R. IX. Mad. 267.) The English Acts, I may mention, 
ITI - exempt leases only where actual possession and occupation 
go with the lease. 

I have already alluded to the practice which obtains 
in this country for the borrower, in the case of a mortgage 
by conditional sale, to convey the estate absolutely to 
the lender ; the latter agreeing, by a contemporaneous agree- 
ment which is sometimes verbal, that he will re-convey 
the estate to the borrower on repayment of the loan. 
Adinissi- The question, whether such parol agreement could be 
b aroT f received in evidence to control the terms of a docu- 
evidence ment which was on its face a deed of absolute sale, 
discussed. was ra } sec i j n the Calcutta High Court in the case of 
Kassinath Chatter jee v. Chundy Churn Banerjee (V. Suth 
W. R., 68, F. B.), and was referred to a Full Bench, when 
a majority of the Judges returned an answer in the 
negative. 

Kassinath It is perhaps necessaiy to observe that the law laid 
Chatterjee ^own ^ y the Court in Kassinath Chatter jee v. Chundy 

v. Lnundy J . " , 

Churn Churn Banerjee, does nob in any way trench upon any 
ru | e o f jji n{ ] u or Mahommedan law, neither of which, as I 
have already said, refuses to give effect to parol agreements. 
" Admitting that the law allows sale of land or other 
contracts relating to land to be made verbally, it does not 
follow that, if the parties choose to reduce their contract 
into writing, they can bring forward mere verbal evidence 
to contradict the writing, and to show that they intended 
something different from that which the writing expresses, 
and was intended to express. If a man writes that he 
sells absolutely, intending the writing which he executes 
to express and convey the meaning that he intends to sell 
absolutely, he cannot, by mere verbal evidence, show, that, 
at the time of the agreement, both parties intended that 
their contract should not be such as their written words 
express, but that which they expressed by their words to 
be an absolute sale should be a mortgage." (Per Peacock, 
C. J., in Kassinath Chatterjee v. Chundy Churn Baner- 
jee, V. Suth. W. R., 68, F. B.) The exclusion of parol 

evidence! ev i^ en ce for the purpose of qualifying the terms of a 
written instrument, rests upon the presumption that 
when parties choose to reduce the terms of a contract 
to writing, they intend to insert the whole of the terms. 
A different rule would open the widest door to fraud and 
perjury. 



PAROL EVIDENCE. C3 

A distinction, however, is taken by the Court between LECTUEE 
parol evidence of an agreement and evidence of the " acts " 
and " conduct" of the parties, the Chief Justice being of Parol evi _ 
opinion that parol evidence is admissible to explain the deuce of 
acts of the parties, as for instance, that the document pur- act8 . and 

. f conduct. 

porting to be a conveyance was not accompanied or 
followed by possession. It is, however, not quite easy to 
discover the ground upon which the distinction is made, 
a distinction which, as pointed out by a learned Judge, 
is hardly reconcileable with the principle upon which 
the exclusion of parol evidence is founded. 

In the case of Madhub Chunder Roy v. Gungadhur Mndhub 
Shamuntho (XI. Suth. W. R. 450; III Ben. L. Rep., f^ r 
83 A. C.) Mr. Justice Markby is reported to have Gunga- 
said : "It seems to me to be very difficult to under- f s *"'^ WB _ 
stand the distinction drawn between evidence of a parol tko. 
agreement contradicting the terms of a written contract 
being inadmissible, and evidence of the acts of parties 
contradicting the terms of such a contract being ad- 
missible. In all these cases, one starts with the pro- 
position that there was a written instrument which unequi- 
vocally and unmistakeably declares the intention of the 
parties, and I should have thought that it was quite as 
objectionable, if not more so, to contradict the plain 
terms of the contract, by what are called "acts" by the 
Full Bench, which can only lead to an inference, than 
to contradict them by an express and unequivocal and 
unmistakeable parol arrangement between the parties. 
I should have thought that the principle was this, that 
when we have once got a clear expression in writing 
of that which professes to be the intention of the par- 
ties, that must conclusively be taken to be the relation 
which was intended to be created between them, and 
that to get at their intention, no other evidence, whether 
of contemporaneous acts or agreements, ought to be 
admitted." 

Since the above observations were made, the Legislature Provision 
has passed the Indian Evidence Act, section 92, of which f the ^vi- 
says: "When the terms of any such contract, grant or on tip 
other disposition of property, or any matter required by point, 
law to be reduced to the form of a document, have been 
proved according to the last section, no evidence of any 
oral agreement or statement shall be admitted as between 
the parties to any such instrument or their representatives 



G4 LAW OF MORTGAGE. 

LECTURE in interest, for the purpose of contradicting, varying, 
IIL adding to, or subtracting from, its terms." 

Proviso (1). Any fact may be proved which would 
invalidate any document, or which would entitle any 
person to any decree or order relating thereto, such as 
fraud, intimidation, illegality, want of due execution, want 
of capacity in any contracting party, want or failure of 
consideration, or mistake in fact or law. 

Proviso (2). The existence of any separate oral agree- 
ment as to any matter on which a document is silent, 
and which is not inconsistent with its terms, may be 
proved. In considering whether or not this proviso applies, 
the Court shall have regard to the degree of formality 
of the document. 

Proviso (3). The existence of any separate oral agree- 
ment, constituting a condition precedent to the attaching 
of any obligation under any such contract, grant or dis- 
position of property, may be proved. 

Proviso (4). The existence of any distinct subsequent 
oral agreement to rescind or modify any such contract, 
grant or disposition of property, may be proved except 
in cases in which such contract, grant, or disposition of 
property is by law required to be in writing, or has been 
registered according to the law in force for the time being 
as to the registration of documents. 

Proviso (5). Any usage or custom by which incidents 
not expressly mentioned in any contract are usually 
annexed to contracts of that description, may be proved : 
provided that the annexing of such incident would not be 
repugnant to, or inconsistent with, the express terms of 
the contract. 

Proviso (6). Any fact may be proved which shows in 
what manner the language of a document is related to 
existing facts. 

Authorities The language of the section is not wholly free from 
for, and ambiguity, and has given rise to a number of conflicting 

agamst,the , . P J ,-, i ,-, -, , ,, ? 

admissibi- decisions ; there being authorities both for, and against, 

ntyof the reception of parol evidence of the acts and conduct 

dence. eVl " of the parties. (For cases in which oral evidence was 

admitted, see Kassinath Chatterjee v. Chundy Churn Ban- 

erjee, V Suth. W. R., 68 ; Ben. L. Rep., Sup. Vol., 383 ; 

Ram Dyel Kooer v. Bishen Dyel Singh, VIII Suth. W. 

R., 339 ; Pheloo Monee v. Greesh Chunder Bhuttacharjee, 

VIII Suth. W. R., 515; Nundolall Mitter v. Prosunno 



PAROL EVIDENCE. 65 

Moyee, XIX Suth. W. R., 333 ; Ram Doolal Sen v. Radha- LECTURE 

nath Sen, XXIII Suth. W. R., 167; Muttyloll Seal v. An- ni - 

nundo Chunder Sandle, V Moore lud. App., 72 (explained, 

however, in Kasheenath Chatter jee v. Chandy Churn Ban- 

erjee, V Suth. W. R., 68, and Banapa v. Sundardas, I. 

L. R., I Bom., 333) ; Buksu Lakshman y. Gcvinda JKauji, 

I. L. R., IV Bom., 594 ; Hasha Khand v. Jesha Premaji, 

I. L. R., IV Bom., 609 (foot note); Govinda v. Jesha Premaji, 

I. L. R., VII Bom., 73 ; Cutts v. Brown, I. L. R., VI Calc., 328 ; 

S. C., VII Cal. L. Rep., 171 ; Kashinath Dass v. Hurrihur 

Mookerjee, I. L. R., IX Calc., 898 ; Hem Chunder Soor v. 

Rally Churn Das, I. L. R., IX Calc., 528 ; S. C., XII. Cal. 

L. Rep., 287 (g) ; Parbadi Sahani v. Mohamed Hossein, 

I Ben. L. Rep., 37, A. C. ; Maxwell v. Mountacute, Pre. 

Ch., 526 ; Walker v. Walker, II Atk., 99 ; Dixon v. 

Parker, II Ves., 225 ; Young v. Peachy, II Atk., 257 ; 

Joynes v. Stratham, III Atk., 388 ; Francklyn v. Feme, 

Barn. Ch., 30 ; Cotterell v. Purchase, Ca. t. Talbot, 61 ; 

Spurgeon v. Cottier, I Eden., 55 ; Holmes v. Mathews, IX 

Moore P. C. C., 413 ; Barnhart v. Qreenshielde, IX Moore 

P. C. C., 18 ; Langton v. Horton, V Beav., 9 ; Douglas 

v. Culverwell, III Giff., 251. In the following cases, oral 

evidence was rejected : Madhub Chunder Ray v. Gunga- 

dhur Shamuntho, XI Suth. W. R., 451 ; S. C., Ill Ben. 

L. Rep., 83 A. C. ; Banapa v. Sundardas Jagjivandas, 

I. L. R., I Bom., 333, and the cases cited therein ; Ram 

Doyal Bajpie v. Heera Lull Paray, III Cal. L. Rep., 386 ; 

Daimoddee Paik v. Kaim Taridar, I. L. R., V Calc., 300 ; 

S. C., III. Cal. L. Rep., 419.) 

In support of the exclusion of parol evidence, it has 
been said that the acts and conduct of the parties would, 
at the best, furnish evidence of an unwritten or oral 
agreement, and that if direct evidence of an oral agree- 
ment is inadmissible, d fortiori, indirect evidence of such 
an agreement would be inadmissible. On the other side, 
it has been said that parol evidence of the acts and con- 
duct of the parties ought to be admitted on the ground 

(g) I may mention that Mr. Justice Field who heard the appeal, in 
the first instance, was of opinion that the evidence had been rightly 
received, not as evidence of a contemporaneous oral agreement, but 
as evidence of conduct subsequent to the deed, that the parties had 
waived the arrangement incorporated in the document, and had, by 
mutual agreement, evidenced by conduct, treated the transaction as a 
mortgage, but the distinction appears to be a very refined one, and does 
not seem to have been accepted by the learned Judges of the Appeal Court. 

R. B. G., M. 5 



GG 



LAW OF MORTGAGE. 



Fraud 

and 

mistake. 



LECTURE of fraud or mistake. But, it seems to me that this pro- 
^_ position is true only in a qualified sense, and it is very 
doubtful if the qualification has been attended to in some 
of the reported cases on the subject. It cannot be denied 
that, if the terms of an agreement have not been reduced 
to writing by fraud or mistake, the document may be 
rectified or reformed by the Court; and as in this 
country, law and equity are not administered by different 
tribunals, the Court may in such cases receive oral evi- 
dence as a defence to an action founded on the document, 
instead of relegating the aggrieved party to a suit to have 
the instrument reformed. A defendant in this country 
has a right to set up by way of defence in a suit against 
him upon a written contract, such a state of facts as would 
justify the Court in amending it in a suit brought ex- 
pi7~sly for that purpose, and it would seem that such a plea 
ma 1 ' be raised even in an action in a Small Cause Court 
(Freu*,n v. Paul, XII Suth. W. R., 532) (h}. But before 
any such evidence can be given, you must first prove 
that the whole of the terms was not reduced to writing 
by fraud or mistake. But unless the Court is justified 
in presuming from the relative helplessness of the bor- 
rower, that the lender fraudulently caused the deed to be 
so prepared as not to truly represent the nature of the 
transaction, I do not well see how you can allow oral 
evidence to vary the terms of a written document, unless 
a proper case is made out for its admission. It seems 
to me, that in order to lay a foundation for the reception 
of such evidence, you must first prove that, by fraud or 
mistake, the document does not correctly represent the 
nature of the transaction. 

It has been sgrnetimes said that such evidence is ad- 
missible under proviso (1) of the Evidence Act ; but, the 
fraud mentioned in the proviso clearly refers to contempo- 
raneous, and not subsequent, fraud. A different construc- 
tion would render the whole section nugatory, for, if the 
fraud consisted only in the breach of the oral agreement, 
you could always do what the Legislature says you shall 
not be permitted to do, that is, give oral evidence of such 
agreement to vary the terms of the document. No doubt, 
if it can be shown that the mortgagor, when he signed the 

(*) The present state of the English law is very similar ; Mostynv. 
ThfWext Mostyn Coal and Iron Co. (1C. P. D., 145). See Wilson's 
Judicature Acts, p. 22, notes to (4). 



Effect of 
provisions 
of the Evi- 
dence Act. 



PAROL EVIDENCE. 67 

deed, supposed it to be other than what it purports to be, LECTURE 
he will be allowed to prove such defence, and oral evidence 
may in that case be given of the whole agreement, but 
the mere breach of the oral stipulation would not be 
sufficient to justify the reception of such evidence. (See 
Banapa v. Sunderdas Jagjivandas, I. L. R., I Bom., 333, 
and the cases cited therein. See also the judgment of 
Garth, C.J., in Gutts v. Brown, I. L. R., VI Calc., 328 ; but 
see Buksu Lakshman v. Govinda Kanji, I. L. R., IV 
Bom., 594, and the judgment of Pontifex, J., in Gutts v. 
Brown, I. L. R., VI. Calc., 328) (<i). 

As for the ground of mistake, we must bear in mind p ^o\ evi- 
that even Courts of Equity in England are not in the habit theradmis- 
of rectifying instruments, except where there is a clear sibie in a 
mistake in reducing the agreement into writing, and owing ^ 
to the mistake of the draftsman, either in matter of law or 
of fact, the document does not correctly represent the inten- 
tion of the parties. It is only where some of the terms 
are left out by mistake that rectification will be allowed; 
but there can be no rectification if the parties intentionally 
omit to reduce into writing all the terms of the actual agree- 
ment. If a power to redeem, for instance, is intentionally 
left out of an instrument under the mistaken notion that its 
insertion is superfluous, no rectification would be allowed, as 
the parties never intended that the power should form part 
of the instrument although the omission was due to a mis- 
take of law ; but it would be different if the power was 
intended to be put into the instrument and omitted by a 
mistake in the draft. (Lord Irnham v. Child, I Bro. C. C., 
92; Lord Portmore v. Morris, II Bro. C. C., 219; Lord 
Townshend v. Stangroom, VI Ves., 332 ; Harbidge v. 
Wogan, V Ha., 258). An examination of the cases will, 
moreover, show that in most, if not in all, instances, where 
the Court has rectified an instrument, there has been some- 
thing beyond mere parol evidence ; such, for instance, as a 
rough draft of the agreement or written instructions for the 
preparation of the deed, or the like. 

(i) Mr. Justice Pontifex in this case throws out an opinion that it 
would be open to a party to prove that what is ostensibly a conveyance, 
was intended to be a mortgage under proviso (2) of Sec. 92 of the Indian 
Evidence Act, but this view was dissented from by the Chief Justice, 
and is not reconcileable with the judgment of the majority of the 
learned Judges in the full Bench case of Kasinath Chatterjee v. Chandi 
Churn Banerjee (V Suth. W. R., 68), where, however, Mr. Justice 
Njrm an, who was in the minority, expressed a similar opinion. 



68 LAW OF MOHTGAGE. 

LECTUBE I ought to mention that the question of the admissibility 
III- of parol evidence of the acts and conduct of the parties was 
justice" elaborately discussed in Baksu Lakshman v. Govinda Kanji 
Meiviirs (I. L. R., IV Bom., 594), where Mr. Justice Melvill, after 
judgment. p O j n tj n g ou t that such evidence may be received, either on 
the ground of part- performance, or of estoppel, sums up his 
conclusions in tliese words : " The rule which, on a considera- 
tion of the whole matter, appears to be most consonant, 
both to the statute law and to equity and justice is this, 
namely, that a party, whether plaintiff or defendant, who 
sets up a contemporaneous oral agreement, as showing that 
an apparent sale was really a mortgage, shall not be per- 
mitted to start his case by offering direct parol evidence of 
such oral agreement ; but if it appear clearly and unmis- 
takeably, from the conduct of the parties, that the trans- 
action has been treated by them as a mortgage, the Court 
will give effect to it as a mortgage and not as a sale ; 
and, thereupon, if it be necessary to ascertain what were 
the terms of the mortgage, the Court will for that pur- 
pose allow parol evidence to be given of the original oral 
sigreernent. " 

It is to be observed that the learned Judge in his 
judgment refers to the practice of the English Court 
of Chancery, but that practice which has brought upon 
it the reproach, perhaps not wholly undeserved, of arro- 
gating to itself the functions of the lawgiver, would at 
the best, be but a very doubtful guide, and would, scarcely 
justify our Courts in trenching upon the province of the 
Legislature. 

The Specific It seems to me that the true rule on this point is formu- 
Keiief Act. j a ted in Section 31 of the Specific Relief Act in these words : 
" When through fraud or a mutual mistake of the parties, 
a contract or other instrument in writing does not truly 
express their intention, either party, or his representa- 
tive in interest, may institute a suit to have the in- 
strument rectified ; and if the Court find it clearly proved, 
that there has been fraud or mistake in framing the 
instrument, and ascertain the real intention of the par- 
ties in executing the same, the Court may, in its discre- 
tion, rectify the instrument, so as to express that inten- 
tion, so far as this can be done without prejudice to rights 
acquired by third persons in good faith and for value. " 
Parol CTI- it ma y be perfectly true, as observed by Mr. Justice 
Melvill, that there is no country in which distressed and 



CASE OF FRAUD. 69 

illiterate debtors are relatively so helpless and so much LECTURE 
at the mercy of their better educated creditors as in India, 
but I still think there must be some proof of fraud, apart cage o{ 
from the mere fact of the parties standing in the relation fraud, 
of debtor and creditor, to justify the reception of parol 
evidence; but when once the foundation has been laid, 
direct parol evidence of the agreement would seem to 
be equally admissible with evidence of the acts and 
conduct of the parties; for it cannot be denied that 
there is, at least, the same danger in admitting in evidence 
the acts and conduct of the parties as in admitting direct 
oral evidence of the agreement. There may, for instance, 
be a conflict of evidence on the question of value, or on the 
question of transfer of possession, and these facts again may 
be sought to be accounted for, in various ways,by fraud and 
perjury. There is no such distinction to be found in the 
English cases, except where part performance is relied upon 
as taking a case out of the Statute of Frauds, but Mr. 
Justice Melvill refuses to rest his judgment on the ground 
of part-performance as " savouring of over-much refine- 
ment, " and the learned Ju'lge, therefore, bases his decision, 
as I understand it, on the sole ground of fraud. I, 
therefore, find it difficult to bring myself to accept the 
qualification with which he fences in the rule regarding 
the admission of oral evidence. It seems to me that you 
must either admit both kinds of evidence or none. But 
you cannot shut out one kind and admit the other. It may 
be that the rules of evidence as formulated in the Evidence 
Act, are too artificial for the people of this country, but, if 
so, the remedy for the evil can only be applied by the 
Legislature. The question is one which our Courts are not 
unfrequently called upon to decide, and the conflicting 
decisions on the point show, that the intervention of the 
Legislature would not be uncalled for. 

I hope I shall not be accused of unbecoming presump- 
tion if I venture to warn you against the danger of being 
led away by the usual common places about English Equity, 
a system which grew up, we must remember, under very 
peculiar conditions, and whose origin is inextricably bound 
up with the history of English law. In former times when 
the Legislature had not broken out into the activity which 
characterises it at the present d&y, the functions of the 
law-maker and the law-expounder were not very sharply 
defined, and a very thin line divided the respective domains 



70 LAW OF MORTGAGE. 

LECTURE of the legislator and of the judge. No Court, I think, 
III. would venture now, by its judgment, to repeal a statute, 
and yet this was actually done by the English Judges in 
Taitarum's Taltarum's case when they virtually abrogated the Statute 
Case. p e D OI1 i g> a statute which had been in force for about two 
hundred years, by what a learned but somewhat irre- 
verent writer calls a piece of solemn juggling (Monahan 
on The Method of Law, p. 14). The Chancery Judges were 
certainly not slow to follow the example, if indeed, they 
were not the first to set it, by frittering away the provi- 
sions of not a few Acts of Parliament, when they found 
themselves unable to accept the principle on which they 
were based. The same methods which were openly em- 
ployed in transforming the common law which Equity 
always professed to follow, were also employed, less openly 
it is true, but not less effectively in modifying the sta- 
tute law of the country. But a repetition of such per- 
formances will not be suffered in modern times, and I view 
with dismay, although, I confess, not with surprise, the 
attempts made, from time to time, to introduce the practice 
in India (j). Apart from the danger of confusing the 
boundary which separates the administration of the law 
from the making of it, the practice can by no means be 
held up as a pattern for imitation by our Courts. Emi- 
nent English Judges, who clearly saw the mischief it was 
calculated to produce, have occasionally raised their voices 
against it, and the protest made by Lord Bedesdale will 
not be regarded as at all too strong by those who are 
familiar with the undisguised attempts of Equity Judges 
to usurp the functions of the Legislature. " The Statute," 
said Lord Redesdale, speaking of the Statute of Frauds, 
" was made for the purpose of preventing perjuries and 
frauds, and nothing can be more manifest to any person 
who has been in the habit of practising in Courts of 
Equity, than that the relaxation of that Statute has 
been a ground of much perjury and much fraud. If the 
statute had been rigorously observed, the result would 
probably have been, that few instances of parol agree- 
ments would have occurred. Agreements would, from the 
Relaxation necessity of the case, have been reduced to writing, where- 
tute'of 818 " as> i fc i >s manifest, the decisions on the subject have 
Frauds. opened a new door to fraud; and, under pretence of 

O') See the observations of the Lords of the Judicial Committee in 
Thumbusanmy Moodelly v. Hossaln RowtJien, I. L. R., I Mad., 1. 



EQUITABLE MORTGAGE. 71 

past execution, if possession is had in any way whatsoever, LECTURE 
means are frequently found to put a Court of Equity in 
such a situation that, without departing from its rules, it 
feels itself obliged to break through the Statute." (Lindsay 
v. Lynch, II Sch. and Lefr., 5. See also the observations of 
Lord Alvanley inForster v. Hale, III Ves., 712, 713.) And 
even Story, who speaks more cautiously, is obliged to admit 
" that the exceptions thus allowed, do greatly trench upon 
the policy and objects of the Statute of Frauds ; nnd, per- 
haps, there might have been as much wisdom originally in 
leaving the Statute to its full operation, without any at- 
tempt to create exceptions, even in cases where the Statute 
would enable the party to protect himself from a perfor- 
mance of his contract through a meditated fraud. For, 
even admitting that such cases might occur, they would 
become more and more rare as the Statute became 
better understood ; and, a partial evil ought not to be 
permitted to control a general convenience. And, indeed, 
it is far from being certain that these very exceptions do 
not assist parties in fraudulent contrivances, and increase 
the temptations to perjury, quite as often as they do 
assist them in the promotion of good faith, and the fur- 
therance of justice. These exceptions have also led to 
great embarrassments in the actual administration of 
equity ; and although, in some cases, one may clearly see 
that no great mischief can occur from enforcing them, 
yet in others, difficulties may be stated in their practical 
application, which compel us to pause, and to question 
their original propriety. " (Story's Equity Jurisprudence, 
765.) 

I have said that contractual mortgages may be created TWO kinds 
either by writing or by parol. They may also be either ex- j^f ^ ' 
press or implied. There is one important class of mortgages, g*gm, x- 
I say class, because in English law they form a class by p r essand 
themselves, in which the intention to create a mortgage m 
is presumed from the conduct of the parties. Thus, if money 
is borrowed on a deposit of title-deeds, the Court would 
infer an intention to charge the property covered by the 
title-deeds, with the repayment of the money. The transac- 
tion, I need hardly point out, is, however, very different from 
a true legal mortgage which is not based upon any express or 
implied consent of the parties, although the difference is 
sometimes veiled by the ambiguity of the term " implied 
contract " in English law. In English law, a mortgage of 



72 LAW OF MORTGAGE. 

LECTURE this kind is called an equitable mortgage, because, follow- 
m - ing a well-known maxim, equity regards the transac- 

Equitabie tion in the same light as a formal mortgage ; and this 

mortgage. S0 rt of mortgage being recognised in equity is called an 
"equitable mortgage" as opposed to a "legal mortgage." The 
expression is also applied to similar transactions between 
natives of this country, although, strictly speaking, it can 
be properly applied only in a country in which law and 
equity are administered as two distinct systems. 

Equitable Equitable mortgages, although common enough in the 

mortgages ,-, V, i L v A. 

in the mo- Presidency towns, do not seem to be very common in the 
fussft. mofussil. We, indeed, find an instance of it in an early 
case in the Sudder Dewany Adawlut, but the parties to 
the transaction seem to have been residents of Calcutta, 
and the difference of opinion between one learned Judges 
by whom the appeal was heard, shows that the case was 
one of the first impression, and that the transaction was 
by no means common at the time. The report of the case 
to which I refer, is not very full. It would, however, 
appear that a certain person being indebted to the plaintiff 
and being pressed for payment, made over to him the title- 
deeds of certain property. It does not, however, appear that 
the debtor, when he made over the title-deeds, expressly 
stated his intention to offer them as a security for the debt. 
The property was afterwards sold under an execution by the 
Sheriff, and the purchaser bought with notice of the plain- 
tiff's claim. The plaintiff sought to enforce his lien on the 
property, contending that the purchaser under the execution 
had purchased the property subject to his lien. The Zillah 
Judge having given judgment in favour of the plaintiff, upon 
the ground that the deposit by the borrower of the title- 
deeds was equivalent to a mortgage, the decree was affirmed 
on appeal to the Sudder Dewany Adawlut, although, one of 
the Judges was inclined to think that the mere delivery 
of the title-deeds was not sufficient to clothe the creditor 
with the rights of a mortgagee. (Laljee v. Govindram, VI 
Macnaghten's Sel. Rep., 199.) A few other cases from the 
mofussil may be found scattered in our books of reports, in 
which the Court has given effect to a deposit of title-deeds 
as a valid simple mortgage, but, as I have already told you, 
this is not an usual mode of giving security outside the 
Presidency towns. But, although in the mofussil, an equi- 
table mortgagee only obtains a decree for sale, it would seem 
that a decree for foreclosure may be obtained in the High 



DELIVERY OF TITLE-DEEDS. 73 

Courts in the exercise of their original jurisdiction (Ram- LECTUBE 
narain Bose v. Ramcunny Paul, and Pertab Chunder 
Paulit v. Aslam Holdar, 24th December 1851, cited in 
Macpherson's Mortgage, p. 591. Note (c). But see Oo 
Noung v. Moung Htoondo, I. L. R., XIII Calc., 322.) 

In English law, notwithstanding some difference of 
opinion at one time, an equitable mortgagee is entitled to 
foreclosure, whether the deposit of title-deeds is, or is not, 
accompanied by an agreement to execute a legal mortgage. 
But, if the terms of the agreement exclude the right to a 
legal mortgage, the Court can only make a decree for sale. 
(Fisher on Mortgage, pp. 480 482.) 

In the case which I have cited from the Select Reports, Mortgage 
the Court inferred an intention to create a mortgage from '^Je^ r by 
the mere fact of the delivery of the title-deeds to the credit- <>f the 
or. The deposit of title-deeds, however, is not unfre- tltle - d eeds. 
quently accompanied by an agreement, either verbal or 
written, in which the intention to create a charge is ex- 
pressly stated. When that is the case, the transaction does 
not substantial!} 7 differ from an express conventional mort- 
gage ; and there is no reason why, as between parties who 
can pass land without writing and without delivery of 
possession, such a transaction should not be given effect to. 
In a case in the Madras Presidency, in which the local 
Sudder Dewany Adawlut had refused to recognise the 
validity of such a transaction, Lord Kingsdown, in deliver- 
ing the judgment of the Lords of the Judicial Committee 
of the Privy Council in appeal, is reported to have said : 
" The decision of the Sudder Dewany Adawlut, so far as 
it respects the enforcement of the lien against the third if further 
and last defendants, appears to have proceeded upon the ^"^'u 
ground that the principles of the English law applicable an agree- 
to a similar state of circumstances ought not to govern ment to 
the decision of that suit in those Courts. This was cor- charge, the 
rect, if the authoritative obligation of that law on the t ransaction 
Company's Courts were insisted on. There is, properly, p S r ess con- 
no prescribed general law to which their decisions must ventionai 
conform. They are directed in the Madras Presidency to m 
proceed generally according to justice, equity, and good 
conscience. The question then is, whether the decision 
appealed against, violates that direction or not. The Court 
of Appeal, reversing the prior decisions, has decided that 
the contract was not operative as a hypothecation, or 
pledge, even between the parties to it. Yet, the evidence 



74 LAW OF MORTGAGE. 

LECTURK shows that the plaintiff looked not simply to the personal 
J* 1 - credit of the person with whom he contracted, but bar- 
gained for a security on land. If any positive law had 
forbidden effect to be given to the actual agreement of the 
parties to create that lien, the Court, of course, must have 
obeyed that law. If the contract of lien were imperfect 
for want of some necessary condition, effect must have 
been, in like manner, denied to it as a perfected lien. But 
nothing of this sort is suggested in the pleadings, or prov- 
Varden ^ ed. It is not shown that, in fact, the parties contracted 
Qggg Sams \vith reference to any particular law. They were not of 
the same race and creed. By the Mahommedan law, such 
a contract as the one under consideration, for a security in 
respect of a contingent loss, would be one, not of pawn, but 
of trust. (Hamilton's Hedaya, Vol. IV, p. 208, tit. ' Pawns.') 
It is not declared that any writing or actual delivery is 
essential to the creation of such trust by that law ; but as 
the contracting parties are not both Mahommedans, that law 
would not have governed the question of the validity and 
foi'ce of their contract, even in the Supreme Court. The 
plaintiff is a Christian ; the contract took place with par- 
ties living within the local limits of the Supreme Court 
of Madras, though it related to land beyond them. It is 
not shown that any local law, any lex loci rei sitce ex- 
ists, forbidding the creation of a lien by the contract 
and deposit of deeds which existed in this case ; and 
by the general law of the place, where the contract 
was made, that is, the English law, the deposit of title- 
deeds as a security, would create a lien on lands, though, 
as between parties who can convey by deed only, or con- 
veyance in writing, such lien would necessarily be equit- 
able. In this case there is an express contract for a 
security on the lands, to which, no law invalidating it, effect 
must be given between the parties themselves. " (Varden 
Seth Sam v. Luckpathy Royjee Lallah, IX Moore Ind. 
App., 307.) 

Equitable 1 have said that equitable mortgages form a distinct 
inEn g g a iand & rou P m tne English law of securities. It was, however, 
only very gradually that they found a place in that system, 
and their ultimate recognition is solely due to the action of 
the Court of Chancery. The Statute of Frauds provides 
that all agreements relating to any interest in land must 
be reduced to writing, and equitable mortgages were sup- 
posed to trench upon the Statute. They were, however, 



MEMORANDUM. 75 

admitted by the Court of Chancery by a somewhat refined LECTUBB 
distinction between executed and executory contracts. m - 
Equitable mortgages appear to have been first recognised by 
Lord Thurlow, but Lord Eldon and Sir William Grant were 
both averse to any extension of the doctrine. It was at first 
attempted to confine the rule only to those cases in which 
the delivery was made with the object of executing an 
immediate pledge ; but, the doctrine has since been over- 
ruled, and equitable mortgages have maintained their 
ground in English law, notwithstanding the jealousy with 
which their introduction was at first regarded. We have 
here an instance, by no means exceptional, in which the 
law has been compelled to yield to the exigencies of com- 
merce. As observed by Lord Abinger : " In commercial 
transactions it may be frequently necessary to raise 
money on a sudden, before an opportunity can be afforded 
of investigating the title-deeds, and preparing the mort- 
gage. Expediency, therefore, as well as necessity, has 
contributed to establish the general doctrine, although it 
may not altogether be in consistency with the Statute." 
(Keys v. Williams, 3 Y. & C, 61.) 

In order to create a valid equitable mortgage, there must Memoran- 
be either express evidence of the intention to do so, which dum> 
may either be by parol, or, by a memorandum in writing, 
or, partly by parol and partly by writing, or a presump- 
tion may arise from the mere delivery of the deeds. 
(See the cases collected in White and Tudor's Leading Cases, 
Vol. I, pp. 774 788.) But if there is a statement in writing 
of the circumstances under which the deposit was made, 
it seems that no parol evidence, inconsistent with such 
writing, would be admissible (Baynard v. Woolley, XX 
Beav., 583 ; Ex-parte Coomb, XVII Ves, 369). 

A formal mortgage of the equity of redemption is also Mortgage 
known in the English law as an equitable mortgage, of t. 116 
while the very same name is given to an informal security, redemp- 
an agreement, for instance, to create a formal mortgage, tion .> an 
but this is apt to be somewhat misleading. In a recent mortgage, 
case in the Calcutta High Court (The Bengal Banking 
Corporation v. Mackertich, I. L. R., X Calc., 315), it was 
held, that a document which only amounted to an agree- 
ment to mortgage, although admissible in evidence as a 
mere agreement, could not, under the provisions of the 
Registration Act, be treated as creating an equitable mort- 
gage so as to bind the propert}^. It does not appear that 



76 



LAW OF MORTGAGE. 



Cases on 
the point. 



LECTURE there was any deposit of title-deeds, but it was contended 
Irl - that the agreement ought to be regarded in equity as 
the same thing as a perfected transaction ; but the con- 
tention was overruled on the ground that it was directly 
in opposition to the provisions of the Registration Act. 
The Chief Justice, in delivering the judgment of the 
Court, observed : " We all know that there are a great 
many documents coming within the description of clause 
(K) which may amount, nevertheless, to what are called 
equitable mortgages, and so create an interest in land. As 
such, they would require to be registered, though as mere 
agreements to mortgage, they, under clause (h), would not. 
The only way, therefore, of meeting the difficulty, seems 
to be, to hold that they are available for the one purpose 
without registration, but not for the other. 

This is only extending to that class of cases the principle 
which we have laid down in the Full Bench case of 
Ulfutunnissa v. Hossein Khan (I. L. R., IX Calc., 520). 

" It is clear, that if we are to hold that equitable mort- 
gages, when they are in the form of agreements to mort- 
gage, do not require registration, such instruments would 
be generally used instead of legal mortgages, for the pm*- 
pose of avoiding registration; whilst, on the other hand, 
if we hold that any document which amounts to an equit- 
able mortgage, cannot be used as an agreement to execute 
a mortgage, we should be defeating the clear intention of 
clause (ti) of the Registration Act." 

In England it is settled law, that an equitable mortgage 
cannot be created by a mere parol agreement, or even by a 
written memorandum to create a security if it is not followed 
by an actual deposit of title-deeds. (Ex-parte Halifax, 2 
M. D. & DeG., 544. Re Bankhead's Trust, 2 K. & J., 560.) 
But a written agreement for a mortgage presently enforce- 
able, may constitute an equitable mortgage. (Tebb. v. Hodge, 
5 C. P. (Ex. Ch., 73.) A mortgage of future crops is also 
sometimes spoken of as an equitable mortgage. Such a 
mortgage is valid, but the transaction is treated as in the 
nature of an agreement to mortgage. (Misri Lai v. 
Mozhafer Hossain, I. L. R., XIII Calc., 262 ; Lalla Tilock- 
dhari Loll v. Furlong, II Ben. L. Rep., A. C., 230.) But 
the mortgagor must have a potential interest in that 
out of which the property may arise. A mortgage by a 
person of the crops which may grow on land in his pos- 
session is valid ; but a mortgage by a person of such crops 



Mortgage 
of future 
crops. 



EQUITABLE MORTGAGE IN INDIA. 77 

on land which he may subsequently acquire would not, LECTURE 
it seems, pass even an equitable interest. (Orantham v. 
Hawley, Hob., 132.) The rules of equity are, no doubt, more Whafc can _ 
liberal than those of the common law, but even in equity a not be ti>e 
naked possibility or a mere expectancy as that of an heir subject of 
to succeed to his ancestor, cannot be the subject of mortgage, m 
although, in some cases, such transactions may operate as 
agreements to create a mortgage. 

I have already said that the expression " equitable " Equitable 
mortgage " is not properly applicable to a transaction t r ! g pfo- 
between natives of this country, and if I use it, it is only perexpres- 
out of deference to long-continued usage. The objection country! 11 ' 8 
is not a mere verbal one. The case of Varden Seth 
Sam v. Luchmiputty Royjee Lallafi, shows the danger 
of extending technical English expressions to transac- 
tions which have only a partial resemblance to one 
another. In the Madras case, the defendants insisted, in their 
defence, upon a wellkuown doctrine of the English Court of 
Chancery, and contended that, as purchasers for value 
without notice, they were protected from the claim of the 
plaiutiif. Now, if you examine the real nature of an equit- 
able mortgage in the English law, and that of a mortgage by 
delivery of title-deeds in India, you will find a very remark- 
able distinction. In the English law, an equitable mortgage 
is only an agreement to mortgage, owing to the incapacity 
of persons subject to the English law to convey otherwise 
than by deed. In this country, however, there being no 
such restriction, a delivery of title-deeds of itself may 
operate as a conveyance. Now, as I have already ex- 
plained to you, a contract does not create a real but 
only a personal right, although English Courts of Equity, 
proceeding upon a very -rational principle, treat the con- 
tract as a conveyance as against purchasers with notice of 
the agreement. In an English Court of Equity, therefore, Defence of 
a purchase for value without notice may be a perfectly {? u r rc v h a ^ 
good defence to a suit by an equitable mortgagee, but in without 
this country it would not furnish any answer, for, the so- notlce - 
called equitable mortgage not being in any sense a contract 
for a mortgage but a perfected pledge, the Indian equit- 
able mortgagee has a right superior to that of any per- 
son claiming under a title subsequently derived from the 
mortgagor. It seems to me that the defence in the Madras 
case, to which I have referred, was suggested by the use 
of the unhappy expression " equitable mortgage " to denote 



78 



LA.W OF MORTGAGE. 



LECTURE 
m - 



Equitable 
defence. 



Case of 

lect'or 11 
fraud. 



the nature of the transaction. I think I have said enough 
to put you on your guard against the misconceptions, 
which an inaccurate use of technical terras, borrowed 
from an extremely artificial foreign system, seldom fails 
to occasion. (See, however, Bunseedhur v. Heera Loll, 
I All. H. C. Rep, 166.) 

Another peculiarity of the English law as regards the 
p| ea Q f purchase for value without notice, is that this 
defence, known to English lawyers as an equitable de- 
fence, was not, until the recent changes tending to the 
fusion of law and equity, available in a Court of Law ; and 
even in a Court of Equity it seems to be doubtful whether 
it could be set up against a purely legal title. This is a 
very fair illustration of the method by which, like the Roman 
praetors of old, Equity Judges in England remodelled the law 
under the appearance of only laying down rules of procedure, 
and indicates the way in which the whole system has been 
gradually built up. The analogy between the " exceptiones " 
of the Roman law and equitable defences is too close 
to be overlooked. The Chancery Judge, in effect says to the 
plaintiff : " We will not give you any assistance against the 
defendant, a purchaser for value. Go to a Court of Law 
and there seek such relief as it can give you." (See Snell's 
Equity, pp. 23 29. Golla Chinna v. Kali Appiah, 
IV Mad. H. 0. Rep., 434.) 

The defence of purchase for value without notice, how- 
ever mus t not be confounded with another defence, which 
has only a seeming analogy with it, but which is founded 
upon an altogether different principle. Where one person 
has by his neglect suffered another to deal with any pro- 
perty in such a manner as to lead an innocent party to 
believe that the other pergon is dealing with his own pro- 
perty, an equity arises in favour of the person who has 
been misled against the person whose negligence has con- 
tributed to the result. It is a general principle of equity, 
that whenever one of two innocent parties must suffer by 
the act of the third, he who has enabled the third party 
to occasion the loss must sustain it (per Turner, L. J., in 
Tayler v. Great Indian Peninsular Railway Company, 
IV D. & J., 574). But the principle does not apply where 
one person has the means of discovering the fraud, or where 
the negligence is only remotely connected with the transac- 
tion, nor does it apply where there is no duty imposed on the 
person who is guilty of such negligence. (Sivan v. North 



EQUITABLE DEFENCE. 79 

British Australasian Company, II H. & C., 182 ; Trus- LECTURE 
tees of Evan's Charity v. Bank of Ireland, 5 H. L., 389 ; 
Vandeleur v. Blagrave, XVII L. J., Ch., 45.) This doctrine 
is not founded upon any technical ground, and there can, 
therefore, be no objection to the recognition of the principle 
by our Courts. The distinction between the two pleas is well Equitable 
illustrated by the recent case of Durga Frosad v. Shumbu defence re- 
Nath, (I. L. R., VIII AIL, 86), where it was held that, SVaL- 
although it would be material to show that the defendant bad High 
had in any way by fraud been kept out of knowledge of the Court> 
mortgage, his not having notice of it, would not otherwise 
affect his liability, inasmuch as the principle on which 
Courts of Equity in England refuse to interfere against 
bond jide purchasers for valuable consideration, when 
clothed with the legal title, has no applicability in the 
Courts of British India. 

I have already stated that the deposit of title-deeds Memoran- 
is sometimes accompanied by a memorandum in writing, ^ l c " fc 
setting forth the nature of the transaction. Even in this tract, 
case, however, the memorandum is not the contract be- 
tween the parties ; but, the contract is implied by the 
Court from the deposit of the title-deeds and the advance 
of the money on such deposit. In the case of a mortgage 
in writing, if the instrument is unregistered, the mortgagee 
cannot, generally speaking, enforce his security against 
the land, because the contract is evidenced by the instru- 
ment itself, and if the writing is inadmissible, no other 
evidence is allowed to be given. In the case, however, of 
a mortgage by deposit of title-deeds, although there may 
be a memorandum in writing, it is not looked upon 
as the instrument creating the mortgage, but, as observed 
by the Court in Kedarnath Dutt v. Sham Loll Khettry, 
" The mortgage is created by the agreement which is evi- 
denced by the loan and the deposit of the title-deeds. The 
mortgagee may, therefore, rely upon the parol agreement, 
which is implied by the deposit of the title-deeds." The 
distinction is an important one, and requires to be illus- 
trated by one or two cases in which the question has 
been discussed. In the case of Kedernath Dutt v. Sham Kedematk 
Loll Khettry, to which I have already alluded, the facts ^^J' La n 
were shortly these. The plaintiff, who asked the Court to Khettry. 
declare his rights as an equitable mortgagee on certain 
premises, had advanced to Woomachurn Banerjee a 
certain sum of money on the deposit of the title-deeds 



80 LAW OF MORTGAGE. 

LECTURE of some property belonging to the borrower. Wooma- 
m - churn also executed a promissory note, whereby he pro- 
mised to pay to "Sham Lall Khettry or order, the sum of 
Rs. 1,200, with interest at the rate of 24 per cent, per 
annum, for value received in cash." There was an en- 
dorsement on the promissory note in these words: "For 
the repayment of the loan of Rs. 1,200, and the interest 
due thereon of the within note-of-hand, I hereby deposit 
with Babu Sham Lall Khettry, as a collateral security, 
by way of equitable mortgage, title-deeds of my property 
situate at No. 11 in Fuckeer Chand Hitter's Street at 
Mirzapore in Calcutta." (Sd.) " Woomachurn Banerjee." 
There was some question as to whether the transaction was 
completed when the promissory note was given, but the 
Appellate Courtthoughtthatthe question whether there was 
a complete equitable mortgage before the promissory note 
was given, or, whether that was the completion of the 
transaction, was not material. It seems, that after the 
deposit of the title-deeds, the property was sold under an 
execution against Woomachurn, and purchased by the 
defendants Kedernath Dutt and Madhub (Jhunder Bose. 
These defendants resisted the plaintiffs suit on the ground, 
that the mortgage was created by an express agreement 
which was reduced to writing, and, as the endorsement 
was not registered, the plaintiff could not enforce any 
claim against the land which, as I have already said, had 
intermediately passed to them under an execution against 
Woomachurn Banerjee. The objection, however, was 
overruled. Sir Richard Couch, in giving the judgment 
of the Court, observed : " The rule with regard to writings 
is, that oral proof cannot be substituted for the written 
evidence of any contract which the parties have put into 
writing. And the reason is, that the writing is tacitly 
considered by the parties themselves as the only repository 
and the appropriate evidence of their agreement. If this 
memorandum was of such a nature that it could be treated 
as tlie contract for the mortgage, and what the parties 
considered to be the only repository and appropriate evi- 
dence of their agreement, it would be the instrument by 
which the equitable mortgage was created and would come 
within section 17 of the Registration Act. But it was not 
a writing of that character. As I have said, the equitable 
mortgage was created by the agreement which was evi- 
denced by the loan and the deposit of the title-deeds. The 



NATURE OF MEMORANDUM. 81 

promissory note, whether given either at the same time LECTURE 
or some hours afterwards in pursuance of the understand- IIJ - 
ing between the parties, was evidence of the terms upon 
which the loan was made, viz., that the interest should be 
at the rate of 24 per cent. 

" But, as regards the contract between the parties, if Memoran- 
there had been no memorandum at all on the promissory d j!^ n e y l i 1 "" 
note, there would have been a complete equitable mort- deuce of 
gage. When we consider what the memorandum is, we de P 3It - 
find it is not the contract for the mortgage nor the agree- 
ment to give a mortgage, for the Rs. 1,200 : it is nothing 
more than a statement by Woomachurn Bauerjee of the 
fact from which the agreement is inferred. It is an admis- 
sion by him that he had deposited the deeds upon the 
advance of the money for which the promissory note was 
given. It is not by the memorandum that the Court 
takes the agreement for the mortgage to be proved, but l>y 
the deposit of the deeds. It is no more than a piece 
of evidence showing the fact of the deposit which might 
be proved by any other evidence. The memorandum need 
not have been produced. 

" On the ground, therefore, that this was not a writing 
which the parties had made as the evidence of their con- 
tract, but only a writing which was evidence of the fact 
from which the contract was to be inferred, I think it does 
not come within the description of documents in the 17th 
section of the Registration Act." (Kedarnath Dutt v. 
Sham Loll Khettry, XX Suth., W. R., 150; XI Ben. L. 
Rep., 404. See also Ruploll Mitter v. Ramlochan Sircar, 
Suit No. 516 of 1877, unreported ; also Oo-Noung v. 
Moung Htoon-oo, I. L R., XIII Calc, 322.) 

There is another case to be found in the books (Jivandas Bombay 
Keshavji v. Framji Nanabhai, VII Bom. H. C. Rep., 45, cai ? e on the 
O. C.) which is somewhat stronger. In that case the pc 
plaintiff had. agreed to lend a certain sum of money to 
Devji Keshavji, on a deposit of the title-deeds of cer- 
tain property belonging to the debtor. The title-deeds 
having been deposited, the plaintiff continued to advance 
certain sums of money, from time to time, till the whole 
sum advanced amounted to that which the plaintiff had 
originally agreed to advance. On the 13th of June 1865, 
after the Registration Act of 1864 had come into force, 
and when the last advance was made, a Guzerati document 
was executed by the debtor in 'which, after stating the 

R. B. G., M. 6 



82 LAW OF MORTGAGE. 

LECTUBE amounts which had been advanced from time to time by 
In - the plaintiff, the debtor proceeded to say : " According 
to these particulars I have received or borrowed from you, 
at interest, Rs. 25,000 in cash and currency notes. On 
account of the same, there are mortgaged at your place 
my piece of land at Naigani, namely, a garden with a 
building (or) a bungalow, which (land) is registered under 
No. 36 in the Collector's books, and the building or dwell- 
ing-house built on the said piece of land, which is registered 
under No. 9 in the books of the House-assessment Col- 
lector. All the deeds and other ' vouchers ' relating to the 
said land having been left in mortgage at your place, 
Rs. 25,000, namely (Rs. twenty-five thousand) have been 
received (or borrowed) at interest thereon for an unlimited 
time. " 

Security This document was not registered ; and the question arose 
delivery of whether the writing being inadmissible in evidence, the 
the deeds, plaintiff could enforce his rights as mortgagee. The ques- 
tion was answered in the affirmative ; and Mr. Justice 
Ba} 7 ley, in giving judgment, is reported to have said: "I 
consider that the contract for a security on the land was 
created when the loan was applied for, and, agreed to, and 
the deeds were handed over to Karsandas ; and that the 
receipt then, and those subsequently, given, did not nor did 
the Guzerati document of the 13th of June 1865, on which 
day Rs. 25, the last instalment of the Rs. 25,000, was 
advanced create or declare any right or interest within 
the meaning of the Registration Acts. The rights of the 
parties, be they legal or be they equitable, had already 
been created and perfected on the 31st of October 1864, 
and it required no memorandum or writing to render 
such rights valid ; nor, in fact, was there evidence that any 
such document, or any deed or writing, was, on the 31st 
of October 1864, contemplated by the parties. Suppose 
the receipts and the instrument of the 13th June 1865 
had never existed, the lien or charge on the property 
would still, in my opinion, have been perfect and valid. The 
fact of such an informal native document having been sub- 
sequently given, and executed after the transaction had been 
completed, cannot, I think, in any way be held to affect 
the validity of that which Sir Lawrence Peel, in the 
Calcutta case, calls ' a perfected contract of pledge,' or, to 
borrow the words of Lord Kingsdown, a ' contract which 
created between the parties a lien on the land. ' 



PAROL "EVIDENCE. 83 

"In general, no doubt, where a contract lias been reduc- LECTURE 
ed into writing by the parties, the writing is the best 
evidence of it, and must be produced. But it is not in Paro] ev ._ 
every case necessary, where the matter to be proved has dencewhen 
been committed to writing, that the writing should be pro- admissible, 
duced. If, for instance, the narrative of an extrinsic fact 
has been committed to writing, it may } r et be proved by 
parol evidence. Upon this principle, a receipt for money 
given on unstamped paper, will not exclude parol evidence 
of the payment, and the paper on which it is written may 
be produced, not as evidence of itself, but as a material 
memorandum, which a witness who saw it given, may refer 
to, and give parol evidence of the fact of payment Ram- 
bert v. Cohen (IV Esp., 213) ; I Taylor on Evidence, p. 412, 
5th ed. So, a verbal demand of goods, is admissible in 
trover, though a demand in writing was made at the same 
time. Smith v. Young (I Cainph., 439). The fact, too, of 
birth, baptism, marriage, death, or burial may be proved 
by parol testimony, though a narrative or memorandum 
of these events may have been entered in registers which 
the law requires to be kept; for the existence or contents 
of these registers form no part of the fact to be proved, 
and the entry is no more than a collateral or subsequent 
memorial of that fact, which may furnish a satisfactory and 
convenient mode of proof, but cannot exclude other evi- 
dence, though its non-prod uetion may afford grounds for 
scrutinising such evidence with more than ordinary care. 
(I, Taylor on Evidence, p. 413./' 

The above cases, however, must be distinguished from Title-deeds 
another class, of which you will find an instance in the case ^j^ 8 ^ 611 
of Dwarkanath Mitter v. Saratkumari,(VH Ben. L. Rep., 55, letter. 
O. C. J.). In that case, the title-deeds were deposited with a 
letter which stated that they were delivered to the creditors 
as collateral security for the twenty thousand rupees which 
fell due on that date, and, the Court pointed out, that 
the letter explained why the deeds were deposited, and 
that the case was, therefore, not one in which the charge 
would be implied from the deposit itself, nor was the 
equitable mortgage made expressly by parol You will 
observe that, in this case, there was no evidence of an 
agreement to give a mortgage, such as the loan of the 
money accompanied by the deposit of title-deeds. With- 
out some letter or verbal communication, there would have 
been nothing to connect the debt which had been incurred 



84 LAW OF MORTGAGE. 

LECTTTBE with the deposit of the deed. The mere possession of the 
m ' title-deeds by the creditor without evidence of the contract 
upon which the possession originated, or at least, of the 
manner in which that possession originated, so that a con- 
tract may be inferred, will not be enough to create an 
equitable security. (Dixon v. Muckleston, L. 11., VIII Ch. 
App., 155 ; Gunput v. Adarjee, I. L. R., Ill Bom., 312. See 
also Neve v. Pennell, II Hemming and Miller, 170. Dis- 
tinguish Russel v. Russel, I White and Tudor, L. C., 773). 
jaitha The recent case of Jaitha Bhima v. Haji Abdool Syad 

^nT^fi- Oosman, (I. L. R., X Bom., 635) is also a very instructive 
dool Syad authority on equitable mortgages. It appears from the 
Oosman. re port that the plaintiff having consented to lend 
Rs. 10,000 to the defendant, the latter deposited with him, 
on the 2nd April 1883, the title-deeds of a certain pro- 
perty. On receiving them, the plaintiff told the defendant 
that he would take them to his attorney, have a deed 
drawn up, and then advance the money. The defendant 
applied to the plaintiff for the money before the deed 
was prepared, but the plaintiff refused, saying he would 
not advance the money until he was satisfied by his 
attorney, and the deed had been prepared. At the time 
the deeds were handed over to the plaintiff (i. e., the 2nd 
April 1885) there was no existing debt due by the 
defendant to the plaintiff. On the 6th April 1885, the 
mortgage-deed was executed, and, on the same day, the 
money was advanced by the plaintiff to the defendant. 
The plaintiff stated that he had advanced the money on 
the security of the title-deeds on the same day. He did 
not say how long before the execution of the deed the 
money had been paid ; but the deed itself recited that 
the Rs. 10,000 was paid immediately before the execution 
of the mortgage. The mortgage-deed was not registered. 
The plaintiff stated that he knew that it required regis- 
tration, but that it was left unregistered at the request of 
the defendant, who did not wish to be exposed in the 
eyes of the public. 

The plaintiff sued for a declaration that he was entitled 
to an equitable mortgage upon the said property, and for 
the sale thereof, in default of the payment of the mortgage- 
debt. He contended that the loan had been made on the 
security of the title-deeds which had been deposited on 
the 2nd April ; that he had, no doubt, intended to obtain a 
legal mortgage, but that he had abandoned that intention 



PAROL EVIDENCE. 85 

by consenting to leave the mortgage-deed unregistered, LECTUEB 
and had, on the 6th April elected to rely upon his equit- 
able mortgage. It was, however, held, that the plain- 
tiff had no equitable mortgage. At the time when the 
deeds were deposited, there was no antecedent or existing 
debt, nor was there any oral agreement that the title- 
deeds should stand as a security for future advances, nor 
was any advance, in fact, made until the mortgage-deed 
was about to be executed. It was clear that if the defen- 
dant had not been ready to execute the deed, no advance 
would have been made. The money was, therefore, really 
advanced on the security of the mortgage-deed, though, at 
the time the money was advanced, the plaintiff hud the 
title-deeds in his possession. 

In delivering judgment, the Court observed: "When 
there is a debt in existence, and title-deeds are deposited 
by the debtor with the creditor to secure the debt, an 
equitable mortgage is at once created ; and that is so, even 
though the deeds are deposited for the express purpose of 
having a legal mortgage prepared (see Dayal Jairoj v. 
J ivrqfratami, I. L. R., 1 Bom., 237, and the cases therein 
cited) ; and I apprehend the law to be the same, when 
title-deeds are deposited under an oral agreement to cover 
present and future advances. As each advance is made, 
it becomes a charge upon the land comprised in the title- 
deed, from the force of the prior oral agreement that it 
shall be so. (Jivendas v. Frdmji, VII Bom. H. C. Rep., 45, 
O .0. J. ; Ex-parte Langston, XVII Ves., 227 ; Ex-parte 
Whitbread, XIX Ves, 209; Ex-parte Kensington, II 
V. and B., 79). 

"In Seton on Decrees, p. 1131, the law is thus stated: 
' If deeds are delivered to enable a legal mortgage for se- 
curing an existing debt to be prepared, then an equitable 
mortgage is completed ; secus if to secure a fresh loan yet 
to be made. For this proposition, see Hocldy v. Bantock 
I. Russ., 141; Keys v. William, III Y. and C., 55; and 
Ex-parte, Bruce, I Russ, 374, are cited. The secus is borne 
out by the following passage from the judgment in Keys v. 
William, III Y. and C., p. 61. 'Certainly, if,. before the 
money was advanced, the deeds had been deposited with a 
view to prepare a future mortgage, such a transaction could 
not be considered as an equitable mortgage by deposit ; but 
it is otherwise where there is a present advance, and the 
deeds are deposited under a promise to forbear suing, 



86 I- AW OF MORTGAGE. 

LECTURE although they may be deposited only for the purpose of pre- 
m - paring a future mortgage. In such case, the deeds are 
given in as part of the security, and become pledged from 
the very nature of the transaction. 

Effect of j n khe present case, when the deeds were deposited with 
deeds? ry the plaintiff, there was no antecedent or existing debt, nor 
was any oral agreement made that the title-deeds should 
stand as a security for future advances, nor was any ad- 
vance, in fact, made until the mortgage-deed was about to 
be executed ; and there is no doubt that, had the insolvent 
not been ready to execute the deed, no advance would 
have been made. The money was really advanced on the 
security of the mortgage-deed, though, at the time the 
money was advanced, the plaintiffs had the title-deeds in 
their possession. That is so, however, in the case of almost 
every legal mortgage. The question resolves itself into 
this. Does a mortgagee in possession, (as he usually is) of 
the title-deeds of his mortgagor, obtain an equitable mort- 
gage when he actually advances money upon the security 
of a legal mortgage about to be executed, and when such 
legal mortgage, by reason of not being registered, never 
operates as a mortgage ? To hold that he does, would, to a 
considerable extent, defeat the policy of the registration 
law. It would be also implying an agreement which is 
really contrary to fact, but yet is an agreement which 
parties would probably enter into on all occasions, were the 
desirability of it to occur to them. If, however, they ex- 
pressed it in words, the provisions of section 92 of the 
Evidence Act (I of 1872) would exclude it from the consider- 
tion of the court. The application of the maxim, 'expres- 
sio facit cessare taciturn,' would, as upon similar principles, 
I think, exclude the implied agreement. (See per Lord 
Cairns in Shaw v. Foster, at page 340, of the L. R , V Eng. 
and Ir. App., p. 321.) The plaintiffs' possession of the 
title-deeds is properly referable to the fact of the premises 
having been conveyed to them, and to their, therefore, 
being entitled to the deeds ; but they have not taken the 
proper steps to make that conveyance to them effectual 
in law. 

" The case for the plaintiffs is put thus : If the money 
had been advanced, and the legal mortgage had not been 
executed, there would have been a good equitable charge 
upon the premises. Is not the result the same when the 
parties do not choose to complete the mortgage they have 



EFFECT OF DELIVERY OF DEEDS. 87 

executed by registration ? Assuming, for the sake of argu- LECTURE 
ment, that the proposition enunciated is, in the absence of 
an agreement to that effect, sustainable, the answer is, 
that the Evidence Act, section 92, and the maxims I have 
referred to in the former case, have no application, while 
in the latter they apply. It is said the parties have, in fact, 
waived the completion of the legal mortgage, but I think 
this is not the correct view. There is no direct evidence 
to that effect ; and, in fact, they have not waived it. The 
interest was paid in respect of the mortgage ; and its receipt 
was endorsed upon the mortgage-deed. They have only 
omitted to take the steps requisite to enable a court to give 
effect to its terms. 

" Sumpter v. Cooper (II B. and Ad., 223), is relied upon 
as an authority in favour of the plaintiffs' view. In that 
case, however, the deeds were deposited, in 1827, to secure 
a present advance of 500, and a good equitable mortgage 
was then created by deposit of title-deeds. It was held 
that a subsequent invalid assignment, in March 1828, of 
the premises to the equitable mortgage, did not affect his 
prior valid equitable mortgage. Hiern v. Mill, (XIII Ves., 
114) has also been referred to. In that case, also, the deeds 
were deposited to secure a present advance, and were to be 
retained as security for such advance, till a legal mortgage 
should be prepared and subsequent advances were also ex- 
pressly made upon the same security. The legal mortgage 
was not executed, and the equitable mortgage was held to 
be valid. 

"In James v. Rice (V DeG. M. and G., 461), the deeds 
were in the hands of the plaintiff, and there was a parol 
agreement to give him a legal mortgage to secure an existing 
debt. This was held to create a valid equitable mortgage. 

"I have not been able to find any English case on all fours 
with the present. 

"In tlie case of Dwarka Nath Mitter v. Sarat Coomari 
Dassi (VII Ben. L. Rep., 55), the title-deeds were sent with 
a letter stating that they were to be held as security for 
an antecedent debt. The letter was not registered, though 
it needed registration, and, therefore, could not be given in 
evidence. The holder of the title-deeds sued, in effect, to 
establish an equitable mortgage ; but though he had the 
title-deeds in his possession, as he had no proof of the 
equitable mortgage other than the possession of the deeds 
his suit was dismissed. 



88 LAW OF MORTGAGE. 

LECTURE " That case was recognised and distinguished in Kedar 
"I- NathDutt v. Sham Lai Khettry (VII Ben. L. Rep., 55). In the 
latter case, the equitable mortgage was upheld, as the un- 
registered letter was but a record of the deposit of the title- 
deeds and of the purpose of such deposit, and, therefore, was 
admissible in evidence. The reasoning of the court seems to 
assume that, had it contained the terms of the contract 
between the parties and purposed to create a charge upon the 
land, the decision would have been against the plaintiff." 
(Jaitha, Bhima v. Haji Abdool Syad Oostnan, I. L. R., 
X Bom., pp. 644647)." 

Summary The authorities, therefore, show that where the conduct 
8ions! CI f the parties is such as to raise the inference of a mort- 
gage, such conduct may be relied upon, although there may 
be a statement of fact in writing from which the same 
inference may be drawn. If, for instance, I borrow money 
on the deposit of title-deeds, 1 may state the fact of deposit 
in writing, but the writing will not be the only evidence 
of such deposit, which may be proved by other means. 
If, however, a formal document is executed, I apprehend, 
such document must be taken to be the only evidence of 
the transaction, although there are certain expressions in 
the judgments of the Bombay Court which may lead to the 
inference, that even in such cases the parties may, so to 
speak, go behind the writing, and rely upon the deposit 
coupled with the advance. 

When title-deeds are deposited with the express inten- 
tion to secure an antecedent debt or a present advance, 
or under circumstances from which it may be inferred that 
they are deposited with such intention, and, subsequently 
the depositor executes a formal mortgage which for want 
of registration, or for some other reason, cannot be given 
in evidence, it has been said that the formal mortgage or 
document does not destroy or impair the prior valid equit- 
able clmr S e - (Jeebon Dass v. Framjee, VII Bom. H. C. 
R e P-> O- c - J-> 45; Jeyetha fiheema v. Haji Abdool, I. L. R., 
ed. X Bom., 634.) It appears to me, however, that if an 

equitable mortgage is to be regarded as founded on the 
express or implied consent of the parties, and not upon an 
obligation attached by the law itself, quite apart from any 
question as to the intention of the parties themselves, in 
other words, if it is founded upon an implied, and not 
upon a quasi-con tract, the proposition is open to consi- 
derable doubt. (See the observations of Macpherson J. in 



EQUITABLE MORTGAGE. 89 

Rahumutoolah v. Shuriatoolah, X Suth. W. R., F. B., 60.) LECTURE 
It seems to me, with very great deference, that the fallacy 
which underlies the proposition, like others which cluster 
round an ambiguous term, is veiled by the obscurity of the 
expression ' implied contract ' in the English law. 

From what I have already said, it is clear that a mere Registra- 
memorandum, accompanying a deposit, is not a document memoran- 
the registration of which is compulsory. I have gone at dum not 
some length into the matter, because I think the nature of gJ. npul " 
what is called an equitable mortgage, cannot be properly 
understood without a careful study of the distinction be- 
tween mortgages of this class, and those I have called ex- 
press conventional mortgages ; and this distinction is very 
clearly brought out in the cases in which questions of the 
admissibility of the memorandum, which sometimes ac- 
companies the deposit, have been raised. 

It would seem that an equitable mortgage, although it Equitable 
may be accompanied by a writing, is still only a parol j" t "f, a orai 
mortgage, and, therefore, liable, generally speaking, to all agreement, 
the disadvantages imposed by the law on parol transactions. 
But it has been recently held, that it is not an oral agree- 
ment within the meaning of the Registration Act (Cog- 
gan v. Pogose I. L. R., XI Calc., 158). In giving the 
judgment of the Court, Pigot, J., observed : " An oral agree- Cogan v. 
ment under this section must be understood to mean, p 9 ose ' 
so far as the present question is concerned, an agreement 
merely oral. Now, a mortgage by deposit of title-deeds 
may well be created without any expression of agree- 
ment in words at all ; the essence of the transaction is the 
deposit of the deeds, on which the mortgage becomes com- 
plete. No doubt, as one consequence of it, the mortgagee 
may be entitled to a registered conveyance, but that right is 
an incident of the transaction, and is not of the essence of 
it ; and, hence, I do not think counsel's argument can govern 
the decision of this question, viz., that argument in which 
he contended that an equitable mortgage was an agree- 
ment to execute a conveyance. It is, in itself, a mortgage, 
and carries with it a right to a conveyance ; but, this is not 
the essential character of the transaction. It is a com- 
plete act ; and not an executory agreement. For these rea- 
sons I do not think the case comes under section 48. " The 
learned Judge added : " The matter is of less importance, 
having regard to the provisions of sections 58 and 59, Trans- 
fer of Property Act. From the last paragraph of the latter 



90 LAW OF MORTGAGE. 

LECTURE section, it would appear that, where the Act is applicable, 
III. equitable mortgages outside the towns of Calcutta, Bora- 
bay, Madras, Karachi, and Rangoon, are no longer valid." 
It cannot, however, be denied that an equitable mortgage 
is as much within the mischief of the Act as an ordinary 
verbal agreement, audit may well be doubted, whether the 
judgment sufficiently distinguishes quasi-contr&cts from 
implied agreements properly so called. 

Registra- In England, where there is no writing but the equitable 
England, mortgage is created merely by the deposit of title-deeds the 
necessity for registration does not arise. There is, in fact, 
no instrument Avhich can be registered under the Act 
(Sumpter v. Cooper, II B and Ad., 223); and a creditor, having 
a lien which may be created without any writing, is not 
bound to obtain written evidence in order to protect him- 
self by registration. (Kettlewell v. Watson, XXI Ch. D., 
685.) If the equitable mortgage, however, is accompanied 
by a writing, it will not be available against a subse- 
quent mortgagee, whose mortgage has been duly registered 
without notice of the deposit of the title-deeds. (Hewitt v. 
Loosemore, IX Hare, 449 ; Allen v. Knight, V Hare, 272 ; 
Farron v. Rees, IV Beav., 18 ; Worthington v. Morgan, 
XVI Sim., 547.) 

General To go back : Every species of property, whether move- 
tiorTtnva- a ^^ e or imnioveable, which can be alienated, may be also 
lid. the subject of mortgage ; but it seems that a general hy- 

pothecation will not be recognised as valid by our Courts. 
(Mullick Bashoo v. Goor Bukoh Gir, N.-W. P., Vol. VII, 
p. 265; Chunder Kisliore v. Gooroo Churn, S. D. A., 1855, 
p. 353. Cf. Maniclc Chand v. Reharee Lall, II All. H. C. 
Hep., 263.) A covenant to convey and settle lands will not 
confer a specific lien on the lands of the covenantee, but 
the covenantee will be a creditor by specialty (Sugden's 
Vendors and Purchasers, p. 711); and this rule has been 
adopted by our Courts. (Najibulla Mulla v. Nasir Mistri, 
I. L. R., VII Calc., 196 ; Gunoo Singh v. Latafut Hossain, 
I. L. R., III. Calc., 336 ; Deojit v. Pitamber, I. L. R , I All., 
275 ; Bhapul v. Jagram, I. L. R., II All., 449 ; Ram Rulcsh 
v. Sookh Deo, I All., H. C. Rep, 159; Chonnee Lall v. 
Puhuhvan Singh, H. C. R., N.-W. P. 1868, p. 270; 
JJheri Dorayyav. Maddiputu ftamayya, I. L. R., Ill Mad., 
35.) But it is not essential that the property should 
be described by name ; and in this, as in other cases, 
oral evidence is admissible to prove identity. (For an 



CAPACITY TO MORTGAGE. 91 

instance, see Kanhia Lall v Muhamad Hossain Khan, I. L. LECTURE 
R., V All., 11.) The question, however, appropriately be- IIr 
longs to the law of evidence, and can scarcely be said to fall 
within the province of this lecture. I may mention that the 
question of the validity of general mortgages, is not now of 
much practical importance, as no document which does not 
sufficiently specify the property comprised in it, can be 
registered, and a general hypothecation, therefore, cannot 
under the law be created by a registered instrument. (As 
to the English law on the subject, see Fisher on Mortgage, 
pp. 1819. See also In re Clarke, 35, C. L. D.. 109. Com- 
pare Ramsidh Pande v. Balgobind, I. L. R., IX All., 158.) 

As regards the power to mortgage, it may be said that, Capacity 
generally speaking, a mortgage being a qualified alienation, 
the same rules which regulate the power to sell, also re- 
gulate the capacity to mortgage. A detailed examination 
of these rules which you will find in Mr. Justice Macpher- 
son's treatise on Mortgages would be beyond the scope 
of the present lectures. A doubt may, however, some- Rights of a 
times arise when trustees are empowered to sell, and no ^"ti^fimit- 
express power to mortgage is given. The law on the sub- ed powers, 
ject in England is, that a trustee empowered to sell is not, 
in the absence of any indication to the contrary in the 
language of the instrument, competent to create a mortgage; 
but the rule is obscured by a cloud of verbal distinctions 
and can be disentangled only by a careful study of the 
authorities on the subject. (See the cases collected in 
Lewin on Trusts, p. 425.) 

The question whether a direction to sell would authorize 
a mortgage was discussed in the case of Sreemutty Dino 
Moye Dossee v. Tara Chand Kundoo. (Bourke's Reps., 
A. O. 0,48; III Suth. VV. R., Mis App., 7, note.) The 
will in that case contained a direction by the testator that 
the executor should sell his property at a reasonable price 
and liquidate his debts. In giving judgment Sir Barnes 
Peacock said " A direction to sell a house does not neces- 
sarily include a power to mortgage the same. A direction 
to sell a house, and to invest the surplus in Government 
securities, is a very different thing from a direction to 
borrow a large sum of money at 15 per cent, or some other 
higher rate of interest. The case of Holdenby v. Spofforth 
(I Beavau, 390) shows that a trust ' to make sale or dispose 
of ' the testator's real estates, does not authorise a mortgage, 
there appearing an intention on the part of the testator that 



92 LAW OF MORTGAGE. 

LECTURE the whole estate should be converted. And, in the present 
IIL case, we think that the clear intention of the testator was 
that, if it should become necessary to raise money for the pur- 
poses of his estate, the house in Calcutta should be sold, 
and the surplus proceeds, if any, invested in Government 
securities. When a testator says that the proceeds of a 
sale are to be applied in a particular manner, he practically 
points out very distinctly that the house is not to be 
mortgaged, more especially, that it is not to be mortgaged 
at a high interest, which must, almost necessarily, be in- 
jurious to the estate." 

Power how I may mention that powers are generally construed 
construed. W jj ; j 1 some degree of strictness. A power of attorney, 
for instance, containing a clause empowering a person to 
sell or mortgage the donor's property for the payment of 
his debts, would not authorise the execution of a simple 
money-bond to one of the donor's creditors for payment 
of the money due to him; a simple money-bond being an 
instrument of a different nature from a mortgage-bond. 
(Poorna Chunder Sen v. Proswnno Cooniar Das, I. L. R., 
VII Gale., 253.) 

Bight of 1 must tell you that, under the English law, an executor 
executor. QY ac j m i n i s trator has full power to dispose of the assets 
in his hands, and, incase of an alienation, the assets cannot 
be followed by the creditors of the deceased. Similar 
powers may be exercised by an executor or administrator 
under the Indian Succession Act, section 269; and the 
transferee is not bound to see to the application of the 
purchase-money. " His title is complete by sale and de- 
livery : what becomes of the price is no concern of 
his. " (Per Lord Thurlow, in Scott v. Tyler, II Dick, 725.) 
The same observation applies to mortgages ; and a mere 
direction for the payment of his debts by the testator, 
makes no difference in the right of the executor to deal 
with the assets in any manner that ha thinks fit. If, there- 
fore, an executor pledges a portion of the assets, a creditor 
who should purchase under an execution against the 
general assets, either real or personal, would take only 
subject to the charge created by the executor. (Nilcauta, 
Chatterjee v. Peary Mohan Dass, III Ben. L. Rep., O. C., 13.) 
But if the mortgagee knows that there are unsatisfied 
debts of the testator, and that the executor intends to 
apply the money otherwise than in the payment of such 
debts, he will not acquire a good title. 



EXECUTOR UNDER HINDU LAW. 93 

The executor of a Hindu will has, under the Hindu LECTURE 
Law, only a limited power of dealing with the property 
of the testator ; and his authority, in the absence of any Executor 
directions contained in the will, is subject to the same under Hin- 
restrictions as that of the manager of an infant under the du law ' 
Hindu Law as explained in the well-known case of Hanu- 
man Prosad Pandey (VI Moore Ind. A pp., 293). A mort- 
gage by an executor under a Hindu will can, therefore, be 
only justified, either by the directions given by the testa- 
tor in his will, or by the exigencies of the estate. (Joy- 
kalee Dabee v. Shib Nath Chatterjee, III Ben. L. Rep., 
O. C., 4 ; I Suth. W. R., 33. Of. XIV Ben. L. Rep., 49 ; 
Laganada v. Ramovame, I Mad. H. C. Rep., 384 ; Rooplal 
Khettry v. Mohima Chunder Hoy, X Ben. L. Rep., 274 
note. But see Ashutosh Day v. Mohesh Chunder Dutt, 
Fulton's Rep., 380. Cf. Sreematty Dassi v. Tarachand 
Kundoo, Bourke's Rep., A. O. C., 48 ; Rooplall Khettry 
v. Mohima Churn Roy, X Ben. L. Rep., 271 274 note.) 

The Hindu executor takes no estate to use the phraseo- Hindu ex- 
logy of the English law but only possesses a power of ^u'eiTno 
management. If, therefore, the will gives him a power to estate, 
make a mortgage for a specific purpose, it is the duty of 
the mortgagee to see that the power is strictly followed. 
If the will, however, gives the executor generally an 
authority to pay the testator's debts out of the estate, the 
transferee need not look further than the will itself. 

The Hindu Wills Act gave the executor the same powers Hindu 
as those conferred by the Indian Succession Act, but they Wllls Act * 
have since been modified by the Probate and Administra- 
tion Act (V of 1881), which now regulates the powers of 
executors as well as administrators in cases not falling 
within the provisions of the Indian Succession Act. It is 
true, that an executor or administrator may still, in the 
exercise of his discretion, dispose of the property of the 
deceased, either wholly or in part, in such manner as he 
thinks fit, but such power cannot be exercised except with 
the sanction of the Court (see Chapter VI of the Probate 
and Administration Act). 

Persons under disability, such as minors and lunatics, are Persons 
also incapable of creating a valid mortgage. The rights ablihvln- 
of persons appointed to take charge of their estates, are capable of 
now regulated by Statute in most parts of the country, 
and it seems that acts, not done in strict conformity with 
the directions of the Statute, will be absolutely void. 



94> LAW OF MORTGAGE. 

LECTURE (Chinuman Sing v. Subram Kuar, I. L. R., II All., 902 ; 
in. Manji Ram v. Tara Sing, I. L. R., Ill All., 852.) 

It has been held in Bengal, that a guardian of a minor, 
minor. & not appointed by the Court, is not fettered by the restric- 
tions imposed by the Minors' Act, but may rely upon 
what is called the common law which gives him authority 
to mortgage his ward's estate under certain conditions. 
I will conclude by observing that the question as to how far 
a minor may ratify a mortgage made by him during his 
minority, and as to whether such a ratification can take 
effect to the prejudice of an intermediate incumbrancer 
in cases unaffected by statute law, is by no means clearly 
settled, and the writings of civilian as well as English 
lawyers, show, that the question is beset with consider- 
able difficulty. (Surge's Foreign and Colonial Law, Vol. 
Ill, pp. 166170 ; Pollock's Contract, pp. 5263.) 
Accessions I shall now proceed to discuss the rights of the mort- 
to pledge, gagee, when the property pledged to him has received any 
accession, or undergone any alteration. The general law 
on the subject is that the creditor has not only a right 
against the property mortgaged to him, but also to any 
augmentation ov increase. (Story on Bailment, 292.) 
Thus, to take a familiar illustration, if a flock of sheep 
is mortgaged, the creditor acquires the same rights to 
any natural increase, as he has against the animals which 
composed the flock at the time of the mortgage. On the 
same principle, accessions to the mortgaged property 
by alluvion, become subject to the mortgage. Similarly, 
the goodwill of a business carried on upon the mort- 
gaged premises; and, therefore, any compensation which may 
be paid for it under the Lands' Clauses Act will follow the 
security. (Pile v. Pile, III Ch. D., 36.) I may add that in 
some systems of law, the right of the mortgagee to whom 
land has been pledged, extends to any buildings which 
may be subsequently erected by the debtor on the land. 
Mortga- But the mortgagee has only a qualified right in the acces- 
fothe" gbt s ' on an< ^ * s ^ a ^ e * be redeemed by the mortgagor. Thus, 
accessions, f r example, in Bakshiram Oangaram v. Darku, Tukaram 
OIll Vfi , (X Bom. H. C. Rep., 369), where the mortgagee, by virtue 

qualified r i- . r ' . n rt , J . 

right. or l ns possession as mortgagee, purchased certain trees 
from the Crown on favourable terms, it was held that 
the trees became, by the sale, an increment to the mort- 
gaged estate, and that the mortgage was liable to be re- 
deemed on payment of the mortgage-money with interest, 



RIGHTS OF PLEDGEE. 95 

together with the money laid out in purchasing the trees LECTURE 
and other reasonable expenses. The mortgagee could 
not equitably claim more than the benefit, as a securit} 7 , 
of the addition to the property. So, also, if a village 
without specified boundaries is mortgaged, the mortgagee 
is, on the one hand, entitled to it as a security with any 
casual increase which may occur to it, and is, on the other 
hand, subject to redemption by the mortgagor to the same 
extent. (Sadashiv Anant v. Vithal Anant, XI Born. H. C. 
Rep., 32.) In the last case, the Court expressed an opinion 
that if the boundaries had been precisely laid down by 
topographical references, the case might have been different. 
But I think that in a case of alluvion in this country, 
the mortgagee would, in the absence of any express con- 
tract to the contrary, be entitled to treat it as an accession 
to his security. 

But the leading case on the point is Kishendatt Ram v. Leading 
Mumtaz All (I. L. R., V Gale., 198), in which it was laid cases on the 
down by the Privy Council that the English law which treats pc 
most acquisitions by a mortgagor as enuring for the benefit 
of the mortgagee, and, conversely, most acquisitions by the 
mortgagee, as accretions to the mortgaged property or sub- 
stitutions for it, is founded on equity and good conscience, 
and may be applied in the case of Indian mortgages. 
In that case the Privy Council allowed the mortgagor to 
redeem certain Birt tenures, originally carved out of the 
mortgagor's estate, and afterwards bought in by the mort- 
gagee and treated by him as merged in the superior taluk- 
dary title. It also appeared in evidence that the mort- 
gagee had taken advantage of his position of talukdar de 
facto in acquiring the Birts. Their Lordships say in the 
course of their judgment : " There was some discussion at 
the bar on the English decisions, upon similar questions 
between mortgagor and mortgagee. If the principle invoked 
depended upon any technical rule of English law, it would, 
of course be inapplicable to a case determinable, like this, on 
the broad principles of equity and good conscience. It is Kishendat 
only applicable, because it is agreeable to general equity Ram's 
and good conscience. And, a.gain, if it possesses that ase ' 
character, the limits of its applicability are not to be 
taken as rigidly defined by the course of English decisions, 
although those decisions are undoubtedly valuable, in 
so far as they recognise the general equity of the principle, 
and show how it has been applied by the Courts of this 



96 LAW OF MORTGAGE. 

LKCTUBE country. It is, therefore, desirable shortly to notice the 
II arguments on this point. It seems to their Lordships 
that, although some of the earlier cases may have been 
qualified by more recent decisions, the general principle 
is still recognized by English law to the extent, viz., 
that most acquisitions by a mortgagor enure for the 
benefit of the mortgagee, increasing thereby the value of 
his security ; and that, on the other hand, many acquisi- 
tions by the mortgagee are, in like manner, treated as 
accretions to the mortgaged property or substitutions for 
it, and, then, subject to redemption. The law laid down 
in Rafcestraw v. Brewer (II P. W., 511) as to the renewal of 
a term obtained by the mortgagee of the expired term, being 
'as coming from the same root,' subject to the same 
equity, has never been impeached. The English.case, which 
in its circumstances comes nearest to the present, is that of 
Doe v. Patt (II Doug., 710), in which the principle was 
enforced against a mortgagor. It was there held, that if the 
lord of a manor mortgage it in fee, and afterwards, pending 
the security, purchase and take surrenders to himself 
in fee of copyholds held of the manor, they shall enure 
for the mortgagee's benefit, and the lord cannot lessen 
the security by alienating them. It is difficult to see 
why, as in the case of a renewable lease, the same equity 
should not attach to the mortgagee, particularly if, by 
reason of his position as mortgagee in possession, he had 
had peculiar facilities for obtaining the surrenders." 

To borrow the words of Lord Chancellor Nottingham : 
"The mortgagee here doth but graft upon his stock, and it 
shall be for the mortgagor's benefit." But the mortgagee 
is not under an absolute disability, and a lease bond fide, 
renewed after notice to all persons interested, has been 
held to be not in trust for the mortgagor. (Nesbitt v. 
Tredinnick, I Ba. and Be., 29.) 

Leigh v. The principle of treating any acquisitions, which may be 
'' ett ' made by the mortgagor in respect of the property mortgaged 
by him as part of the security, was carried to a very great 
extent in a recent English case (Leigh v. Burnett, XIX On. D., 
231). It appears that an ecclesiastical lease of a house for a 
term of years, which was renewable by custom, though it 
contained no covenant by the lessors for renewal, was mort- 
gaged to the defendant, and the equity of redemption in 
the leasehold estate was afterwards assigned to a third 
party for value. The Ecclesiastical Commissioners, in whom 



. RIGHTS OF PLEDGEE. 97 

the reversion had become vested, refused to renew the lease; LECTUUE 
but, before the lease expired, they agreed to sell the rever- 
sion to the assignee, but the conveyance was not executed 
till after the expiration of the lease. While the negotia- 
tion for the purchase of the reversion was in progress, the 
assignee borrowed from the plaintiff a certain sum of 
money ; the memorandum given to the plaintiff at the time 
of the loan, stated that the money was to be secured by a 
mortgage of the house "as soon as he had completed the 
enfranchisement of the property from the Commissioners." 
It was contended on behalf of the plaintiff, who had no 
notice of the previous mortgage, that the assignee of the 
equity of redemption was not under an obligation to pur- 
chase the reversion, and that it could not be supposed that he 
intended to make a present of it to the mortgagee of the 
lease. It was clear that his security would have been of 
no value if the lease had simply expired ; why then, it was 
asked, should he obtain the benefit of the purchase of the 
reversion without paying the purchase-mone} 7 ? But the 
Court held that the plaintiff was not entitled to priority 
over the mortgagee of the lease. In giving judgment, Mr. 
Justice Pearson said, " To my mind there is a grievous fal- 
lacy in this argument. I can only treat Newman as the 
mortgagor of the lease ; and, in that character, he could hold 
the reversion only on the same terms as he would have held 
a renewed lease of the property. The doctrine of this court 
lias always been, that the mortgagor of a renewable lease can 
hold a renewed lease only subject to the mortgage. The case 
of Rakestraw v. Brewer (2 P. W., 511) is an illustration of 
this doctrine. There, the mortgagee of a renewable term 
procured from the original landlord a new term to com- 
mence from the expiration of the old one, and it was held 
that the new term was subject to the old equity of redemp- 
tion. If Newman himself were here, he would be entitled to 
redeem the reversion on paying off the mortgage, but he 
would not be entitled to say to the mortgagee of the lease. 
' I bought the property for your benefit, and you can only 
have it on paying me the purchase-money which I gave 
for it.' I cannot understand how any one who claims 
through Newman can be in any better position than he 
would have been. It is impossible for the plaintiff to say 
that, in respect of the purchase-money paid by Newman, 
she is entitled to priority over the mortgagees of the lease. 
I can conceive that she might be able to establish such a 
R. B. G., M. 7 



98 LAW OF MORTGAGE. 

LECTURE claim if she had advanced the money to buy the reversion; 
III- but, that would be because she had no interest in the pro- 
perty through Newman, but was giving up a purchase on 
the terms of being repaid what she had given for it. As 
it is, she lias only a derivative title through Newman, and 
lie could not have maintained such a claim against the 
mortgagees of the lease." (29, Ch. D., pp. 234235.) 
Indian Jt i s> however, extremely doubtful whether our Courts 

donot" 8 will be inclined to carry the doctrine to such an extent. We 
carry the must remember that their Lordships of the Privy Council in 
the 'same t0 the case of Raj a Krishna Dutt Ram v. Raja Momtaz A li, 
extent as (I. L. R., V Calc., 198), express themselves very cautiously, 
casei" 81181 ' an( J> while acknowledging that the principle is, generally 
speaking, agreeable to general equity and good conscience, 
deny that the limits of its applicability are to be taken as 
rigidly defined by the course of English decisions. Those 
decisions are undoubtedly of great value in so far as they 
recognise the general equity of the principle and show the 
manner in which it has been applied by the English Court 
of Chancery, but they do not possess any inherent binding 
authority. To enforce the principle, however, against a 
purchaser from the mortgagor, and that, under the circums- 
tances disclosed in the case of Leigh v. Barnett (19 Ch. D., 
231), to which I have just referred, can scarcely be regarded 
as agreeable to general equity and good conscience. 
Difference There is a very great difference between the position 
mortgagor of a purchaser of the mortgaged property and that of the 
and mort- mortgagor himself which should not be overlooked. Where 
a mortgagor makes an acquisition by purchase, it is no very 
great hardship to him to hold that it should enure for the 
benefit of the mortgagee ; the mortgage being only a 
security for the debt due by the mortgagor. The question, 
however, generally arises in cases in which a third person 
has acquired an interest in the property under mortgage, 
and, if he happens to be a purchaser for value without notice, 
there would seem to be an equity in his favour, at least as 
strong as that in favour of the mortgagee. The mortgagee 
is preferred, and very properly, in respect of the property 
actually pledged to him, because his title is prior in point 
of time. This is an intelligible principle, but the same thing 
cannot be said of a doctrine which would force a purchaser 
of the equity of redemption to make a present to the mort- 
gagee of any acquisition subsequently made by him with 
his own money. 



RIGHTS OF PLEDGEE. 99 

There is,again,some difference between an acquisition made LECTURE 
by the mortgagee and one made by the mortgagor the posi- 
tion of the former being much stronger than that of the ... , 

rc , , , & . ... , Position of 

latter. It the mortgagee makes an acquisition by reason a mortga- 
of any advantages possessed by him which would not be S ee< 
possessed by a stranger, or, if there are circumstances to 
show that the powers of the mortgagee were exerted to 
effect the purchase on favourable terms, the mortgagor will, 
no doubt, be entitled to treat such acquisitions as accretions 
to the mortgaged property, and, therefore, subject to redemp- 
tion. But every purchase by a mortgagee cannot be taken 
to have been made for the benefit of the mortgagor. In 
the case of Raja Krishen Dutt Ram v. Raja Mumtaz AH 
the judgment of the Judicial Committee was based on the 
peculiar circumstances of the case, and cannot, therefore, be 
accepted as laying down a rigid and inflexible rule. In- 
deed, their Lordships themselves say, in their judgment, 
that they are not prepared to affirm the broad proposition 
that every purchase by a mortgagee of a sub-tenure existing 
at the date of the mortgage, must be taken to have been 
made for the benefit of the mortgagor, so as to enhance the 
value of the mortgaged property, and make the whole, in- 
cluding the sub-tenure, subject to the right of redemption 
upon equitable terms. " It may well be," their Lordships 
add, " that when the estate mortgaged is a zemindari in 
Lower Bengal, out of which apatni tenure has been granted, 
or one within the ambit of which there is an ancient 
mokurari istimrari tenure, a mortgagee of the zemindari, 
though in possession, might purchase with his own funds, 
and keep alive, for his own benefit, that patni or mokurari. 
In such cases, the mortgagee can hardly be said to have 
derived from his mortgagor any peculiar means or facilities 
for making the purchase, which would not be possessed by 
a stranger, and may, therefore, be held entitled, equally 
with a stranger, to make it for his own benefit. In such 
cases, also, the patni, if the patnidar failed to fulfill his 
obligations, would not be resumable by the zemindar, and 
the zemindari would always have been held subject to the 
mokurari." (Raja Kishen Dutt Ram v. Raja Mumtaz Ali 
Khan, I. L. R, V Gale., 204-205.) 

It may perhaps occur to some of you that, the absence 
of a well-defined rule is likely to give rise to much 
unnecessary litigation, but it is not always easy, if indeed 
it is possible, to draw a sharp line of distinction. At all 



100 



LAW OF MORTGAGE. 



LECTURE 
III. 



Mortgagor 
having a 
defective 
title. 



Plea of 
purchase 
for value 
without 
notice. 



events it must be done, if it is to be done at all, by the 
Legislature, and cannot be effected by judges, who from 
the very nature of things are obliged to deal with isolated 
groups of facts. 

I may here mention that a mortgagor having a defective 
title, is bound to make good his mortgage out of property 
subsequently acquired by him, and this upon a well-known 
principle applicable to mortgages as well as to other 
transactions ; thus, for instance, if a mortgagor having only a 
half-share in a certain property pretend to mortgage 
the whole of it, the mortgagee will have a right to 
insist upon a charge on the whole property, supposing the 
mortgagor afterwards by purchase or otherwise becomes 
the owner of the other half. The equity upon which 
the mortgagee relies, is that, whenever a mortgagor gets 
into his possession property which he has mortgaged to 
a third person, he is bound to hold that property subject 
to the mortgage originally created by him. In the language 
of the English law, the subsequently-acquired estate feeds 
the estoppel. Thus, in Lootnarain Singh v. Showkhee Loll 
(II Cal. L. Rep., 382.) A, holding a certain mehal as ghatwal, 
mortgaged it to B by way of a zarpeshgi lease for 21 
years ; shortly after the granting of the lease, the zemindar 
got a decree against A, by which A's ghatwali right was 
extinguished. In execution of this decree the zemindar 
ousted and took khas possession of the mehal. Some years 
afterwards, the zemindar granted to A a perpetual mokurari 
lease- of the same mehal : it was held in a suit against 
A, instituted by the assignee of B's rights in the zarpeshgi, 
that under sec. 18, Act I of 1877, A must, out of his 
present estate in the mehal, make good the zarpeshgi. 
(Pranjivan Qovardhan Das v. Baju, I. L. R., IV Bom., 
34 ; Deolie Chand v. Nirban Singh, I. L. R., V Calc., 
253; S. C., IV Calc., L. Rep., 150; Lootnarain Singh v. 
Showkee Lall, II Calc., L. Rep., 382 ; Vishnu Trimbak 
v. Tatia, I Bom. H. C. Rep., A. C. J., 22.) 

This right, however, may be waived by the mortgagee, 
and cannot, it would seem, be enforced against a bond- 
fide purchaser for value, and without notice of the previous 
mortgage. For, strictly speaking, tlie right of the mortga- 
gee is in the nature of a right to claim specific performance ; 
and to such a claim a plea of a purchase for value without 
notice would be a good defence. In Ram Awtar Sing 
v. Tulsi Ram (V Calc. L. Rep., 227), Government having, 



ESTOPPEL. 101 

under the Land Acquisition Act, taken possession of a portion LECTURE 
of certain land which had been mortgaged by the owner, m - 
afterwards, while the mortgage was still in force, re-sold the 
portion taken to the mortgagor, who sold it to a third person 
bond fide for value. It was held, that the mortgage-claim 
could not be enforced against the purchaser, because he was 
a purchaser for value, without notice of the previous mort- 
gage. (Cf. Swa Ram v. All Bakhsh, I. L. R., Ill All., 805, 
where the purchaser bought with notice.) I may mention 
in passing, that the Court expressed a doubt in the above 
case whether th^lien would have attached, even if the pro- 
perty continued in the hands of the mortgagor, as the land 
was taken by Government free from the claim of the mort- 
gagee, who could only claim a lien on the purchase-money. 

A purchaser for value is always regarded with peculiar Doctrine of 
favour by the law. The recent j udgment of the Master of the ^inst 1 
Rolls in General Finance Mortgage and Discount Company purchase 
v. Liberator Permanent Benefit Building Society (10 Ch. D, for value - 
15) shows that the Court is always most reluctant to extend 
the doctrine of estoppel against a purchaser for value. It 
appears from the report that the mortgagor purported to 
grant a freehold estate to the plaintiffs in that case, by way 
of mortgage. The deed contained no recitals, but there 
were the usual mortgagor's covenants for title, including 
a covenant that the mortgagor " had power to grant the 
premises in manner aforesaid." The mortgage was accepted 
by the plaintiffs on the faith of certain forged title-deeds, 
which were produced and handed to him by the mortga.gor. 
At the date of the mortgage, the mortgagor had not the legal 
estate nor indeed any interest whatever in the property 
which he purported to mortgage. Subsequently, however, 
the mortgagor acquired the legal estate and mortgaged it to 
the defendant. In an action brought by the plaintiffs to 
recover possession of the mortgaged property and also of 
the title-deeds, it was contended that the plaintiffs, by 
virtue of their mortgage and the subsequent acquisition of 
the legal estate by the mortgagor, were entitled to priority 
over the defendants, but the contention was overruled on 
the ground that the covenants in the mortgage-deed did 
not amount to a clear and distinct assertion that the grant- 
or had the legal estate to grant. It is true that the case 
was decided on a highly technical point relating to the 
doctrine of estoppel, " an excellent and curious kind of 
learning, " as Lord Coke says, but I refer to it as a 



102 



LAW OF MORTGAGE. 



LECTURE strong instance of the reluctance which the Court feels 
in - in enforcing the principle of estoppel as against a stranger 
who is innocent of fraud. In delivering the judgment 
of the Court, Sir George Jessel after pointing out that it is 
a very unpleasant thing to have to decide a question with- 
out knowledge of the reasons for some of the distinctions 
established by the earlier authorities goes on to say: " I see 
no reason for extending the doctrine. It can have no opera- 
tion except in the case of third parties who are innocent 
of fraud and who have become owners for value, and there 
can be no reason as I intimated at the beginning of my 
judgment that I am aware of, for preferring one innocent 
purchaser for value to another. As against the man him- 
self or persons claiming without value, the purchaser or 
the mortgagee can recover without any recourse to estoppel 
at all ; therefore, considering especially that the jurisdic- 
tion in equity and common law is now vested in every 
court of justice, so that no action for ejectment, or, as it is 
now called, an action for the recovery of land, can be 
defeated for want of the legal estate where the plaintiff 
has the title to the possession, I think I ought not to 
attempt, in any way to extend the doctrine by which false- 
hood is made to have the effect of truth. The doctrine 
appears no longer necessary in law it appears no longer 
useful and, in my opinion, should not be carried further 
than a judge is obliged to carry it" (10 Ch. D., 24-25) (k). 

Frauds of I need scarcely point out that a mortgagee has a much 

gagorand stronger equity in cases of actual fraud by the mortgagor. 

mortgagee. Where, for instance, the assignee of a lease, subject to a mort- 
gage, induced the landlord to take advantage of a forfeiture 
which the tenant committed expressly with that object, 
and afterwards took a new lease of the same property ; 
the Court declared that the new lease was subject to 
the mortgage. (Hughes v. Hoivard, XXV Beav., 575.) On 
the other hand, the mortgagee will not be permitted to 
take advantage of his own fraud. Thus, for instance, in 

(/<:) For a very learned discussion on the point, see Bigelow on 
Estoppels, pp. 348 381. The topic, however, is overlaid in the English 
law with much useless learning, owing to the ' high and transcendental 
effect ' of an estoppel in the common law, on which a great deal of 
ingenuity seems to have been wasted. The conclusion arrived at by 
the learned author is that the after-acquired estate does not pass as 
against a purchaser without notice. But, the rule is subject to an 
exception in favour of a conveyance by a grantor having seisin (that 
is by disseisin) but no title. The exception, however, is based, not on 
general principles, but on certain peculiarities of English conveyancing. 



ESTOPPEL. 103 

this country, although the revenue laws make a clean sweep LECTURE 
of all incumbrances when the property is sold for arrears In - 
of revenue, a mortgagee in possession who suffers the 
estate to fall into arrears cannot purchase it so as to 
acquire an irredeemable interest ; and it will seem that 
the law is the same, whether the estate is allowed to fall 
into arrears properly or improperly. [Raja Oojooderam 
Khan v. Auskootosh Ley, Supreme Court, July 1852, 
reported in the Englishman, 8th July 1852 ; Kelsall 
v. Freeman, Englishman, 4th February 1854 ; Naivab 
Sidhee Nuzar Ally Khan v. Rajah Oojoodhyaram Khan, 
X Moore Ind. App., 540 ; S. C., V. Suth. W. R., P. C., 
85 ; Jagat Mohini Dassi v. Mussamat Sokeemoney Dassi, 
XIV Moore Ind. App., 286 (Of. p. 305) ; S. C., X Ben. L. 
Rep., 19 (Of. p. 33). Cf. Jayanti v. Yerubandi, I. L. R., 
VII Mad., 111.1 The same equity may be enforced against 
a third party if the sale is only a fictitious sale for arrears 
of revenue carried out in pursuance of an agreement 
between the mortgagee and such third party. (Sreenath 
Ghosh v. Hurnath Dutt, XVIII Suth. W. R,, 240 ; Nuzar 
Ally Khan v. Ojoodhyaram Khan, X Moore Ind. App., 
540 ; V Suth. W. R., P. C., 83.) If, however, the property 
is sold otherwise than through the default of the mort- 
gagee, the charge will attach to the proceeds. (Heeralall 
Chowdhry v. Janokeenath Hooker jee, XVI Suth. W. R., 222.) 

Upon a principle closely analogous to the doctrine of Doctrine of 
estoppel, it has been held in England that, where, upon a sale estoppel, 
by a first mortgagee, the property is bought in by the mort- 
gagor himself, the mortgagor acquires the estate subject to 
the second mortgage ; although if the property is bought 
by a third party, he will take it free of all incumbrances. 
It is the duty of the mortgagor to pay off the first mort- 
gagee and so discharge the estate for the benefit of the 
second mortgagee, and he cannot get rid of his obligation by 
purchasing from the first mortgagee instead of paying 
him off. (Otter v. Vaux, 2 K. and J, 650 ; 6 DeG. M. and G., 
638; Shamacharan Bhattacharjya v. Anund Chunder 
Deo, S. A., No. 1613 of 1879, unreported). A somewhat 
difficult question may arise if the mortgagor does not him- 
self buy the property at the sale by the first mortgagee, but 
the property comes to him after passing through six or 
seven different hands. The point was mooted in the case 
of Otter v. Vaux, but was not decided by the Master 
of the Rolls. The question was also raised in this country in 



104- LAW OF MORTGAGE. 

LECTURE the case of Ram Atter Sing v. Toolsiram, (V Cal. L. Rep., 

HI- 227), but was left undetermined by the Court. 
0f /ej . v The principle of Otter v. Vaux will not however 

Vaux, apply in all cases. It is true that a subsequent mortgagee 
takes his security with the chance of the prior mortgagee 
being paid off without having recourse to the estate, and if 
therefore, the latter is paid by the mortgagor himself, there 
can be no question but that the puisne mortgagee gets the 
benefit of the payment and, ordinarily, it makes no differ- 
ence if the payment is made by some stranger to the 
estate. But if the person who makes the payment does 
so under compulsion or for the protection of some interest 
of his own, such payment cannot, on principle, enure for the 
benefit of the puisne incumbrancer. A payment by the 
surety, for instance, would not accelerate the rights of a 
puisne mortgagee. The surety, on the discharge of the debt, 
would be entitled to the benefit of the security. Again 
it is sometimes said, that a prior mortgagee must account to 
subsequent mortgagees for all monies received in respect 
of his mortgage-debt. But the proposition is true only 
in a qualified sense, a prior mortgagee being bound only to 
account for such sums as are received either from the 
mortgagor or from the mortgaged property, but not for 
moneys received from other sources. (Sawyer v. Goodwin, 
1 Ch. D., 351, where a dividend had been received out 
of the estate of the solicitor by the first mortgagee on the 
ground of the solicitor having invested the money on an 
improper mortgage-security. ) 

The English Courts have also refused to extend the 
principle of Otter v. Vaux to a case in which the prior 
mortgage was bought by a trustee in bankruptcy, for the 
benefit of the general creditors of the mortgagor. But 
in such case the trustee will not be in the same favourable 
position as a stranger buying in the prior security. His 
purchase will not indeed neutralise the first mortgage, but 
he may not, any more than the mortgagor himself, defeat 
the rights of a puisne incumbrancer (Bell v. Sunderldnd 
Building Society, 24 Ch. D., 618 ; cf. CracknaU v. Janson, 
6 Ch. D., 735.) 

To return : the right of the mortgagee will, however, 
not extend to what was never pledged to him, although 
it may be substituted in the place of the property origi- 
nally pledged. Thus, to take a familiar instance from 
the Roman law, if a farm together with the slaves upon 



RIGHTS OF PLEDGEE. 105 

it is pledged, and the slaves die and are replaced by LECTURE 
others, the right of the creditor shall not extend to the 
latter, except, as 1 have already said, where they happen 
to be the offspring of the slaves who have died. (Of. 
Webster v. Power, L. R., 2 P. C., 69.) This limitation of 
the right of the creditor, however, must not be confounded 
with cases in which the pledge is not actually destroyed, 
but only, to use the language of Sir James Col vile, 
" assumes a new form." 

A question of considerable nicety on this point arose Rights of 
in the case of Byjnath Lall v. Rar.idin Chowdhry, (XXI [^_ r 
Suth. W. R., 233 ) whicli was heard in the last resort by the ga <reewhen 
Lords of the Judicial Committee of the Privy Council. In P led s e as - 
the case before the Privy Council, which was heard on an new form, 
appeal from a decree of the Calcutta High Court, the facts 
were somewhat peculiar. It seems that the mortgagor 
Gopalnarain Dass was, when he executed the deed of condi- 
tional sale which was the foundation of the plaintiff's title, 
the undisputed owner of an eight-anna undivided share in 
an estate consisting of three asli mouzas called Gunni- 
porebija, Pemburinda and Tajpore Ruttompore, to each Byjnath's 
of which certain Dak hi la villages were appurtenant. Case - 
There was no partition or division among the shareholders, 
and the interest of the mortgagor, therefore, in the whole 
estate was an undivided moiety. In this state of things, 
Gopalnarain executed the mortgage, out of which the 
suit arose, of the whole and entire eight-anna of the whole 
sixteen annas of Mouzas Gunniporebija and Pemburinda, ex- 
pressly excepting from the deed the eight annas of Tajpore 
liuttumpore. It should seem that, before the execution of 
the mortgage, application had been made by some of the co- 
sharers of the mortgagor for a partition of the estate under 
Regulation XIX of 1814. A partition was made by theCol- 
lector,and the result was that, instead of an undivided moiety 
of the whole estate, the whole of Mouza Pemburinda, the 
whole of Tajpore Ruttompore, and the whole of another 
mouza, a dependency of the third Mouza, Gunniporebija, were 
allotted to Gopalnarain, to be held by him in severalty. 
Shortly after the partition, Gopalnarain's rights and interests 
in the mouzas, which fell to his share, were sold at execution- 
sales, and purchased by certain persons, who were the subs- 
tantial defendants in the suit, and who resisted the right of 
the mortgagee, to take anything under his mortgage-deed in 
excess of the eight-anna share of the mouzas which had 



106 LA.W OF MORTGAGE. 

LECTURE been mortgaged to him, the mortgagee insisting upon his 
HI. right to the whole sixteen annas of the inouzas which had 
fallen to the share of the mortgagor in lieu of the undivided 
moiety which was held by the mortgagor at the time of 
the execution of the mortgage. The Court of first instance 
gave judgment in favour of the plaintiff, proceeding upon 
the principle that the mortgagee was entitled to whatever 
was allotted to the mortgagor on the partition in lieu of 
his undivided eight-anna share in the mouzas Gunniporebija 
and Pemburiuda, which was the subject of the mortgage. 
On appeal, however, to the High Court, the right of the 
mortgagee was limited to the share which was expressly 
named in, and covered by, the mortgage-deed, that is, only 
to an eight-anna of Mouza Pemburinda and an eight-anna 
share of Mouza Gunniporebija. The case then went on 
appeal to the Privj^ Council, and the Judicial Committee 
affirmed the decree of the first Court, and declared that 
the principle laid down by the first Court was correct. In 
giving the judgment of the Privy Council, Sir James 
Col vile is reported to have observed : " Let it be assumed 
that such a partition has been fairly and conclusively made 
with the assent of the mortgagee. In that case, can it be 
doubted that the mortgagee of the undivided share of one 
co-sharer (and for the sake of argument, the mortgage may 
be assumed to cover the whole of such undivided share), 
who has no privity of contract with the other co-sharers, 
would have no recourse against the lands allotted to such 
co-sharers, but must pursue his remedy against the lands 
allotted to his mortgagor, and, as against him, would have 
a charge on the whole of such lands ? He would take the 
subject of the pledge in the new form which it had 
assumed. In the present case, there is not a suggestion 
of fraud, nor is there any ground to suppose that the 
partition was other than fair and equal. The mortgagee 
is content to accept what has been allotted in substitution 
of the undivided interest as the fair equivalent of it. 
Their Lordships are of opinion, not only that he has a 
right to do so, but that this, in the circumstances of the 
case, was his sole right, and that he could not successfully 
have sought to chai'ge any other parcel of the estate in the 
hands of any of the former co-sharers. There is, therefore,no 
question here of election, or of the time when the election 
was made. " (Cf. Joala v. Hurbens, N.-W. P., Vol. VIII, 
p. 669 ; Boloram. v. Damoodur S. D. A., 1857, p. 359.) 



RIGHTS OF PLEDGEE IN ROMAN LAW. 107 

In the case of Mohindro Bhusan Biswas v. Shoshee LECTURE 
Bhusan Biswas (I. L. R., V Calc., 883), Mr. Justice Wilson In - 
refused to add the mortgagee of the plaintiff, in a suit for Mortgagee 
the partition of joint family-property, as a party, on the "otn party 
ground that the question as between plaintiff and defen- fo r a p mi- 
dant was, who was entitled to the property in dispute, and tion of 
that, to determine that question, it was not necessary that p^"!^ 1 ' 
the mortgagee should appear, as he would not be bound by 
any finding come to in his absence. But the learned Judge 
at the same time added that, in case of a decree for partition 
being made, the mortgagee should have leave to come in and 
attend the partition proceedings. It would appear that, in 
this case the legal estate was in the mortgagee, the mort- 
gage being in the English form, but the learued Judge still 
refused to add the mortgagee as a party. (See also Mohesh 
Chunder Chunder v. Hurrynath Cowar, suit No. 460 of 
1873, unreported. Distinguish Kirty Chunder Mitter v. 
Anath Nath Dey, I. L. R., X Calc., 97). 

It is worthy of notice that the rights of the mortgagee 
are subject to a similar qualification in the Roman law as 
well as in the jurisprudence of countries whose sj'stems have 
been built up on the basis of that law (I). Thus, it is stated, Mortgage 
in Domat's Civil Law, 1671, that " if an estate belong ^j" 6 
in common, without any division or partition to two or more estate in 
persons, such as co-partners, co-heirs or others, and one of |* oinaa 
them has mortgaged to his creditor, either all his estate or 
the right which he had to that estate, this creditor will have 
his mortgage upon the undivided portion of his debtor as 
long as the estate shall remain in common. But after the 
partition, the right of his debtor being limited to the 
portion that has fallen to his lot, the mortgage of this creditor 
will be also limited to the same. For, although before the 
partition, the whole estate was subject to the mortgage for 
the undivided portion of this debtor, and though a right 
which is acquired cannot be diminished ; yet, seeing the 
debtor had not a simple and immutable right of enjoying 
his share of the estate always undivided, but that his right 
implied the condition of a liberty to all the proprietors to 
come to a partition in order to assign to every one a portion 
that might be wholly and entirely their own, the mortgage, 
which was only an accessory to the debtor's right, implied 
likewise the same condition and affected only that which 

(I) As to the English Law on the point, see Walker on Partition, 
pp. 711. 



108 LAW OF MORTGAGE. 

LECTURE should fall to the debtor's share, the portion of the others 
IIJ - remaining free of them. But if in the partition there was 
auy fraud committed, the creditor might procure a redress of 
what has been doue to his prejudice. " 

It appears that the civilians were not insensible to the 
difficulty in which the mortgagee might be occasionally placed 
by a rigid adherence to this rule. Thus, to take the case, put 
by the writer from whom I have already quoted, of a parti- 
tion of a succession consisting of moveable effects and of only 
a single parcel of land or tenement which it would be either 
impossible or very inconvenient to divide into shares, the 
creditors of the co-heir or co-executor, who should chance 
to have in his lot, either little or nothing at all of the 
lands and tenements, would find themselves disappointed 
in the hopes they may have entertained of having a mort- 
gage upon the lands or tenements that made part of the 
succession. "But these creditors," says the author to whom 
I have referred, " ought to have a watchful eye before the 
partition, both over the moveables and immoveables, that 
nothing be done to their prejudice. For, if the partition 
were made without fraud, they might justly be told that 
their security was only upon what might fall to the 
share of the debtor ; and if, for example, that debtor has 
wasted and dissipated the moveable effects which fell to 
his lot, it would not be just that the shares of the others 
should go to the payment of his debts. But, although the 
right of the mortgagee might, in certain cases, be affected 
by a partition, it could not be prejudiced by any exchange 
made by the debtor without his consent" (Domat's Civil 
Law, 1668 Note R.) (m). 

Mortgagee It is, perhaps, unnecessary to state that as the mortgagee 
not the is not in any sense the owner of the property given to 
tinTmort- ^ im }n mortgage, the mortgagor will not be bound by a 
gaged partition made by the mortgagee in his absence or by an 
property. exc ] ian g e effected by the mortgagee without his con- 
currence, and it ought not to make any difference whether 
the mortgage is in one of the various forms known in this 
country or in the English form; but, it would be quite open 
to the mortgagor to seek to recover from the mortgagee, 
if he choose to do so, the property substituted by the action 

(>) A question of some nicety may arise where a person having an 
undivided share in two estates, mortgages his share in one of them, and, 
afterwards on a partition, lands in the other estate only are allotted to 
the mortgagor. Cf. Jarman on Wills, Vol. I., p. 151. 



RIGHTS OF PLEDGEE. 109 

of the mortgagee for that which was originally mortgaged LECTURE 
to him. The judgment of the Allahabad High Court in In - 
Nidhi Lall v. Muzahar Hossein may, at first sight, seem 
to lay down a contrary proposition, but the facts were very 
peculiar, and I do not think that the learned Judges intended 
to deny the right of the mortgagor to follow the property 
which had, by the action of the mortgagee himself, been sub- 
stituted for that which had been originally given in mort- 
gage. (Nidhi Lall v. Muzahar Hossein, I. L. R.,VII All., 436.) 

The question whether a mortgagee would be estopped by Mortgagee 
a previous judgment obtained against the mortgagor, subse- ot. estop- 
quently to fehe execution of the mortgage, was raised in a previous* 
recent case in the Calcutta High Court (Bonomally Nag judgment. 
v. Koylash Chunder Dey, I. L. R., IV Gale., 692). The 
learned Judges, while acknowledging that the question 
was not free from difficulty, refused to hold the mortgagee 
bound by the previous judgment. 

If the matter were res Integra, the Court might not im- 
probably have arrived at a different conclusion, but the 
question had already been decided in favour of the mort- 
gagee in an earlier case (Dooma Sahoo v. Joonarain Lall 
XII Suth. W. R., 362), and the Court, without expressing 
any opinion of their own, simply followed that decision. I 
may, however, be permitted to observe that the point does 
not seem to have been seriously discussed in that case, and 
was pretty well taken for granted by the Court. (See also 
Madhoo Proshaud v. Purshan Ram, I. L. R., IV Calc., 520 ; 
Tirbhobun Sing v. Jhono Lall, XVIII Suth. W. R, 206.) 

It appears from the report that in the case of Bonomally Bonomally 
Nag, the mortgagee was not in possession, and had no know- Na s' 8 Case - 
ledge of the previous suit, and these facts are, to a certain 
extent, relied upon by one of the learned Judges. It is, 
therefore, doubtful whether the Court intended to la}^ down 
any general proposition on the point, and there seems to be 
authority for the limitation suggested or rather implied 
in tlie judgment of one of the learned Judges. The rule 
on the subject is thus stated in Burge's Foreign and 
Colonial Law, Vol. Ill, pp. 220-221 : " The mortgagee 
is not prejudiced by any recovery which a third person 
may have obtained against the mortgagor in a suit 
instituted subsequent to the mortgage. But it would 
be otherwise, if the mortgagee were, under his contract 
with the mortgagor, in possession of the property, and 
knowingly allowed the mortgagor to litigate with another 



110 LAW OF MORTGAGE. 

LECTURE his title to it, because, in that case, he had it in his 
IIJ - power, by interposing his own prior claim and defending 
his own title, to have prevented such a recovery. " (Of. 
Copis v. Middleton, II Mad., 423.) 

The only observation I wish to make on this passage is, 
that the author is here dealing only with actions of eject- 
ment, and that it does not necessarily follow that a more 
stringent rule of estoppel may not regulate other classes of 
suits in which the person in possession, being also the 
apparent owner, may fairly be regarded as representing 
the rights of all parties interested in the estate. 

Question of The question has been discussed very elaborately in the 

estoppel, recent case of Sitaram v. Amir Begum (I. L. R., VIII All., 
324), and it is pointed out in the judgment that, after a 
mortgage has been duly created, the mortgagor in whom the 
equity of redemption is vested, no longer possesses any 
such estate as would entitle him to represent the rights 
and interests of the mortgagee in a subsequent litigation, 
so as to render the result of such litigation binding upon, 
and conclusive against, such mortgagee. It is also pointed 
out that section 13 of the Civil Procedure Code must be 
interpreted in the same way as if the words " on a title 
arising subsequently to the commencement of tlie first suit " 
had been inserted after the words " under whom they or 
any of them claim " a point which, I may be permitted to 
observe, nobody ever thought of disputing. 

Sitaram In delivering his judgment, Mr. Justice Mahmood said 
* n reference to the difficulty felt by the Calcutta High 
Court in the case of Bonomally Nag v. Koylash Chunder 
Dey (I. L. R., IV Calc., 692) that he saw no ground for 
entertaining any doubt on the point, but, with great defer- 
ence, it may be observed that the rule as to res judicata 
does operate, in many cases, where the party, who is sought 
to be estopped, does not, strictly speaking, claim under 
the person who was a party to the previous judgment, 
although in such cases the rule is for obvious reason subject 
to the qualification that the previous judgment was not re- 
covered by fraud and collusion. If the question is consi- 
dered with reference to general principles of law, it is, I 
venture to think, a mistake to suppose that none but the 
representative of the previous owner can be bound by the 
results of litigation and adverse decree against such owner. 
Lord Coke in speaking of estoppels says : " Privies in law 
as the lord by escheat, tenant by courtesy, tenant in dower, 



ESTOPPEL. Ill 

the incumbent of a benefice, and others who come in by LECTURE 
act of law in the post (i. e., as successors to the property, 
including persons not claiming title under the preceding 
owner) shall be bound by, and take advantage of, estop- 
pels." (Coke upon Littleton, 35 2a.) The case of the rever- 
sioner under the Hindu law is another illustration of this 
principle, which is one founded on considerations of conveni- 
ence, which after all must be the real test of the soundness of 
all general rules. It cannot, moreover, work any practical 
hardship by reason of the qualification with which it is 
guarded, viz., that the previous judgment must have been 
obtained without fraud or collusion. It is to the interest 
of the State that there should be an end to litigation, but 
this object will hardly be accomplished, if any person, 
having any sort of interest in the property, however 
minute, were at liberty to re-agitate questions which have 
been already solemnly decided in the presence of the 
person who substantially represents the estate. (See the 
observations of Norman, J., in Roykunthnath Chatterjee v. 
Ameeroonissa Khatoon, II Suth. W. R., 119 ; see also, 
Tarapershad Mitter v. Ram Nursingh Mitter, XIV Suth. 
W. R., 283.) It seems to me that the provisions of the 
Civil Procedure Code are somewhat defective, not in the 
direction suggested by Mr. Justice Mahmood, but because Mr. Justice 
they do not deal with cases in which persons, although ^^nf 8 
not formally parties to the action, were sufficiently repre- considered, 
sented by the party in the original suit. (Ahmedbhoy v. 
Vulleebhoy, I. L. R., VII Bom., 703, and the cases cited 
therein.) A Mitacshara father, for instance, represents the 
family in a suit regarding ancestral property with a third 
party, and, in the absence of fraud, an adverse judgment 
would bind the sons, although they do not claim under the 
father. So, also, a decree obtained against a mohunt or 
shevait will bind his successors, because he fully represents 
the estate for the purpose of litigation, although an alienation 
or incumbrauce created by him would not be binding on the 
successor. (Golap Chand Babu v. Prosonno Coomary Ddbea, 
XX Suth. W. R., 86 ; affirmed in appeal L. R., II Ind. 
App. 392.) A similar principle is recognised in Continental 
systems, where it seems that a judgment obtained against 
the owner of a restricted estate, will operate as an estoppel 
against the substituted heirs, and, according to the Scottish 
law, an action bond fide litigated by an heir of entail is res 
judicata in questions with succeeding heirs. A restricted 



112 LAW OF MORTGAGE. 

LECTURE power of dealing with property, therefore, does not, as 
IIJ - assumed by the Allahabad court, involve an incapacity to 
represent the estate and to bind others having an interest 
in such estate by the result of litigation conducted in good 
faith with a stranger. (See the observations of West, J., 
in Radhabai v. Anantrao, I. L. R., IX Bom., pp., 217 225). 
Indeed, it would be little short of disastrous if no person 
could acquire a safe title by res judicata if his opponent, 
the owner in possession, happened to create an interest 
even though it might be of the most insignificant character 
in favour of a third person, by way of mortgage, and of 
which the plaintiff might very well be ignorant; again 
this would be still more startling such person might be 
brought into the Court by the mortgagor as defendant, in 
which case he could not compel the mortgagee to join as 
plaintiff. It seems to me that a mortgagor may not un- 
reasonably be taken to represent the estate for all practi- 
cal purposes; as it is not at all likely that he would be 
so indifferent to his own interest as not to put his case 
properly before the Court. (See Anachala v. The Zamin- 
dar of Sevagiri, I. L. R., VII Mad., 328 ; also see the 
observations on p. 335.) It is suggested, in the judg- 
ment of Mr. Justice Mahmood, that the fact, that limitation 
which bars the mortgagor also bars the mortgagee, has 
nothing to do with the question of estoppel; but I venture 
to doubt whether this is really so. The two questions are 
intimately connected, as they both rest upon the supposed 
inability of a person, having a limited power of dealing with 
property, to allow, either by an adverse judgment or by 
adverse possession, a right to grow up in a third person 
which would destroy the rights of others interested in the 
property. (See the observations of West, J., in Radhabai 
v. Anantra, I. L. R., IX Bom., p. 255.) 

Mortgagee But although a mortgagor does not represent the mort- 
bdund by S a o ee so as * bind him by the result of an adverse liti- 
the acts of gation, he may, in certain circumstances, bind the mort- 
gagor "" a ee ky his acts. An illustration of this principle is to 
be found in the case of Lalla Mitterjeet Singh v. Raj 
Chunder Roy (XV Suth. W. R., 448), where it was held that 
a mortgagee of a tenure was bound by an agreement to pay 
a higher rent entered into by the mortgagor in possession. 
Reliance seems to have been placed to a certain extent on 
the fact, that the landlord was ignorant of the mortgage, but 
it is not quite clear whether his knowledge would have 



EIGHTS OF THE MORTGAGEE. 113 

made any difference in the case. The interest of the mort- LECTTTBE 
gagee in the mortgaged premises cannot, however, be de- 
feated by the fraudulent conduct of the mortgagor ; and a 
mortgagee has been, therefore, allowed to enter a caveat 
against the grant of probate of a will, on the ground of the 
will being a forgery and a fraud upon the mortgagee, although 
the mortgagor, the heir-at-law, remained silent. (Sarbomon- 
gala Dassi v. Shashibhoosun Biswas, I. L. K., X Gal., 413.) 

It has been held in England that a mortgagee will 
not be bound by a valuation or other proceedings taken Rights of 
under the Land Clauses Consolidation Act without his con- gag rt ~ 
currence or service of notice of the proceedings on him 
(Ranken v. East and West India Dock Co., XII Beav., 298). 
I am not aware of any Indian case on the point, but the 
mortgagee in this country may exercise by delegation 
the powers conferred by statute on the owner, the ques- 
tion in each case, however, depending partly upon the 
language of the instrument and partly upon the words 
of the statute. (Saadat Ali v. Collector of Sarun, 5 
S.D.A. 1858, .p. 840; Bhaiuani v. Dalmardan, I. L. R., 
III All., 144 ; Vellaya v. Tirna, I. L. R., V Mad., 76 ; 
Narayana v. Makunda, I. L. R., V Mad., 87.) 

Other cases may also occur in which the Court will 
interfere for the protection of the mortgagee. Thus for 
instance, in England the trustee in bankruptcy of a mort- 
gagor, may be prevented from affecting the rights of the 
mortgagee of a lease-hold interest by disclaiming under 
the Bankruptcy Acts, although if the disclaimer be once 
executed the title of the lessor will be complete, and the 
rights of the mortgagee extinguished (Buxton, Exp. 15 
Ch. D., 289 ; Ditton, Exp. 3 Ch. D., 459; Sadler, Exp. 19 
Ch. D., 122). The mortgagee has similarly been allowed 
to restrain the trustees of a turnpike road from reducing 
the tolls which were the subject of the mortgage. (Lord 
Crewe v. Edleston, III Jur. N. S., 128, 1061 ; I DeG. and J., 
93.) The mortgagee has a substantial interest in the pledge, 
and it has been held in England that he ma3 r , for the pur- 
pose of enforcing his security upon the interest of the mort- 
gagor in an agreement, sue for the specific performance of 
the contract, if the mortgagor neglects to assert his rights 
(Brown v. London Necropolis, &c., Co., VI Suth. W. R., 188.) 

A mortgagee, where the mortgage deals with the whole Mortgagee 
interest of the mortgagor in the mortgaged premises, is detain the 
entitled to the title-deeds, and it has been said that he is title-deeds. 

R. B. G., M, 8 



114 LAW OF MORTGAGE. 

LECTURE not bound to produce them or even his deed of mortgage 
IIL until his claim is satisfied (Beattie v. Jetha Dungarsi, 
V Bom., H. C. Rep., O. C. J., 152) ; but this decision, which 
was based solely on the English law on the point, can 
hardly be regarded as satisfactory, it being, to say the least, 
open to considerable doubt (notwithstanding the dictum of 
Wigram V. 0. in BentincJc v. Willink, II Hare, 1), how far 
the practice of the English Court was founded on princi- 
ples of abstract justice. The law has now been altered in 
Mortgagor England by statute (See Conveyancing and Law of Pro- 
en titled to per ty Act, 1881, c. 41, sec. 16), and the mortgagor is now 
them. C entitled, notwithstanding any stipulation to the contrary, 
to inspect, at all reasonable times, the title-deeds in the 
custody or power of the mortgagee. The case in the 
Bombay High Court is an instance, and it is by no means a 
solitary one, of the influence exercised, not always benefi- 
cially, by the English law on the practice, of our Courts. 
It is true that in the absence of any well defined rule, our 
Judges may very well borrow from the practice of the 
English Court of Chancery as successive generations of 
Equity Judges have borrowed, not unfrequently without 
any acknowledgment, from the Roman law, but an indis- 
criminate introduction of English law, although it might 
render the task of the Indian Judge comparatively less 
laborious, can scarcely be regarded with unalloyed com- 
placency by suitors in this country. 

The artificial character of the English law of mortgage 
is well illustrated by the position of a mortgagee of lease- 
hold property. In England, if the whole term is mortgaged, 
the mortgagee may be sued on the covenants by the lessor, 
whether he does or does not enter into possession. (Wil- 
liams v. Bosanquet, I Bro & Bing, 238 ; III Moore, 500.) Lord 
Mansfield, in one case, it is true, decided differently being of 
opinion that the Court must have regard to the real nature 
of the transaction, but his decision was shortly afterwards 
over-ruled by Lord Kenyon, that 'stickler for antiquity,' 
who thought that the precedent confused law and equity, and 
was, therefore, a dangerous innovation. But, happily in this 
country, we know of no distinction between law and equity. 
Liabiiityof But where the subiect of mortgage is lease-hold property 

themort- i ,v . J , . -L i 

gagee of a an d * ne mortgagee is put in possession of it under circum- 

leasehoid stances which amount to an assignment or transfer of the 

5nt- lease-hold interest, the mortgagee becomes liable, as a rule, 

to pay the rent (Kannye Lall Sett v. Nistoriny Dossee, 



POWER OF SALE. 115 

I. L. R., X Cal., 443). T hemortgagee may also make himself LECTURE 
liable by having his name entered in the landlord's books ^ 
as the tenant of the property. 

I will conclude by a few observations on the validity of a Power of 
power of sale contained in a mofussil mortgage. The ques- mofussu!! 6 
tion appears to have been for the first time raised in the 
case of Bhowani Churn Mitter v. Joykissen Hitter, heard 
before the late Sudder Dewany Adawlut of Calcutta in the 
year 1842, when the Judges were unanimously of opinion 
that a sale by the mortgagee under the power did not 
pass a valid title to the purchaser. 

The decision has been criticised by Mr. Justice Mac- 
pherson in his work on Mortgages (pp. 139 148), and there 
is no doubt that some of the reasons given by the learned 
Judges will not bear examination. But the judgment of 
the Court substantially rests upon the broad ground that 
it would be inexpedient to allow the mortgagee in this 
country to exercise the power. It is true that such a 
power has been found beneficial in England, but English 
mortgagors, as a class, are perfectly competent to take care 
of their own interests. In India, however, we have to Validity of 
deal with a very different order of men. The mass of? ^. * 
mortgages in this country consists of mortgages of ancestral cussed, 
fields by ignorant peasants to a class of people not remark- 
able for their scrupulousness, and any one having experi- 
ence of Indian litigation, must admit the danger of arm- 
ing our money-lenders with the right to sell the properties 
pledged to them without the intervention of a Court of 
Justice. As observed by the Court in Bhowani Churn 
Mitter v. Joykissen Mitter : " This Court has only to de- 
clare such a condition legal, and in the course of a short 
time not a mortgage-bond would be without it. The 
mortgagee would then sell his debtor's property to 
suit his own time, and in such manner and with such 
publicity and formalities as he thought proper. Fraud, 
it is to be feared, would frequently accompany the 
transfers, and the property fall into the hands of the 
mortgagee, or some of his connexions even (as in this case it 
is alleged the purchaser is the son-in-law of the mortgagee) 
at an inadequate price, leaving the lender at liberty still to 
pursue the borrower for the balance that may remain after 
the sale." (VII Macnaghten's Sel. Rep., 429.) 

With reference to the argument that the exercise of 
the power of sale was not unfair to the debtor, the learned 



116 LAW OF MORTGAGE. 

LECTTTEE Judges observed : " It is urged for the plaintiff that the 
^ public sale of the mortgagor's property cannot be a disad- 
Bhowani vantageous mode of proceeding towards the latter ; that 
Chum his property is sold to the highest bidder ; and that, if a 
Case*' 3 sur pl us remains, it belongs to himself. We have not to 
deal with abstract theories or bare possibilities, but with 
what experience and the principles of the Regulations fur- 
nish us as our guides in the determination of a novel 
and unprecedented case. In a case of execution of a decree 
of Court, the proclamation of sale is an invitation to 
others interested to come and state their claims. If no 
claim is preferred, the title of the purchaser may generally 
be considered a pretty fair one. If claims are preferred, 
they are summarily investigated, and, should they appear 
fraudulent, are rejected; and, in this case, too, the purcha- 
ser may generally be considered in a good position, as few 
are willing to incur the expense of a regular action on 
grounds already declared by a Court of Justice to be primd 
facie fraudulent. And yet, with all the formalities and 
securities of a transfer of real property by sale made by 
a Court of Justice, how frequent are the complaints that 
the property has been sold at an inadequate price, how 
much more frequent would they be, had not this Court 
held that inadequacy of price, at a regularly conducted 
sale, forms no ground for its reversal ! If such be the case 
in such sales, the evils to be apprehended from permit- 
ting private individuals to sell their debtor's property, in 
satisfaction of their claims, must be ten-fold. But few 
purchasers at a fair price will be found, when, in all pro- 
bability, a law-suit (as the order granting the review 
expresses it) will be tacked to the purchase. The object 
of the Regulation is to prevent improvident and injurious 
transfers of landed property at an inadequate price ; the 
result of such a practice as that which the contract be- 
fore us involves would be to render them universal." (VII, 
Macnagh ten's Sel. Rep., pp. 440-441.) 

Sale under it is true that the utmost latitude ought to be given to 
ought to* 5 the parties to contract in any manner they please, but 
be con- freedom of contract wears a very different aspect accord- 
Court. y i n & as ^ * s allowed to the English landowner or the Indian 
peasant, and I am fortified in my view by the recommend- 
ation of the Indian Law Commissioners, who propose, in 
their Sixth Report, that a sale under a mortgage should 
in every case be conducted by the Court. (See also the 



POWER OF SALE. 117 

observations of Melvill, J., in Kesub Rao v. Bhowaneejee, LECTURE 
VIII, Bom. H. C. Rep., A. C. J., 142.) 

We have already seen that in most continental sys- p ower { 
terns, a sale without judicial process, is absolutely void, sale not 
Article 2078 of the French Code says: "The creditor 
cannot in default of payment dispose of the pledge, saving code, 
to him the power of procuring an order of the Court that 
such pledge shall continue with him in payment, and up 
to its due amount according to an estimate made by com- 
petent persons, or that it shall be sold by auction. " 

" Every clause which shall authorise the creditor to 
appropriate the pledge to himself, or to dispose thereof 
without the above-mentioned formalities, is void." 

You will remember that the French Code, equally with 
the other systems of law on the Continent, has been largely 
shaped by the Roman law, and if the power which the 
Roman pledgee possessed has not been retained in those 
systems, it may fairly be presumed that the exercise of the 
power is not suited to every condition of society. But 
for the peculiar economic conditions under which land is 
owned in England, it may, indeed, fairly be doubted whe- 
ther the system would have worked well even in that coun- 
try. Be that, however, as it may, there can be no doubt that 
it would be dangerous to trust the Indian money-lender 
with a power which is so much liable to abuse (/c). 

(&) My attention was called since the delivery of these lectures 
to an unreported judgment of Bayley and Hobhouse, JJ., which was 
printed in the Appendix, in the first edition of this book. The learned 
Judges in that case refused to follow the law laid down by the Sudder 
Dewany Adawlut in Bhowani Churn Mitter's Case. The question has 
also been since discussed in two cases in the Bombay High Court, in 
both of which the Court upheld the validity of the power ; but I do not 
think that any general rule can be extracted from either of these cases. 
In the first case, Petamber v. Vanumali, (I. L. R., II Bom., 1), the mort- 
gage was in the English form, and the mortgagees were a joint-stock 
company having their head office in London, and the Court in uphold- 
ing the validity of the power relied upon both these circumstances. 
In the other case Jagjivan v. Skridhar, (I. L. R. , II Bom., 252), 
the Court expressly upheld the validity of the power on the ground 
that, although the land was outside the Island of Bombay,both the parties 
to the transaction were residents of that city, and that, the mortgage 
being in the English form, the parties must be taken to have contracted 
with reference to the English law on the principle laid down by the 
Supreme Court of Calcutta in the case of Bholanath Kundu Chondhry v. 
Aunnoda Prosad Roy, (I Bouln, 97). I may also mention that in Bhannu- 
motee v. Premchand, (XV Ben. L. Rep., 28), Mr. Justice Jackson seems to 
have expressed a doubt as to the soundness of the decision of the Sudder 
Dewany Adawlut in Bhowani Churn Mitter's case. But it was not found 
necessary to decide the question. The matter, however, has now been 
set at rest by Sec. G9 of the Transfer of Property Act. 



LECTURE IV. 

WHAT constitutes simple mortgage Simple mortgage an equitable lien, and really 
comprises two transactions Questions of construction Miller v. RangaNath 
Personal liability of the mortgagor Noratum v. Sheo Perqush No parti- 
cular form of words necessary to constitute simple mortgage Intention of 
the parties Cases on the point Power of sale Nature of security possessed 
by simple mortgagee Simple mortgage how made available Agreement as 
to rate of interest Nature of decree for sale Mortgage decree liiht of 
mortgagee to sue Period of grace allowed by some courts to mortgagor 
Rights of a purchaser under a decree not for sale Conflicting views of the 
Allahabad and Madras, and the Calcutta and Bombay High Courts What 
passes in a sale under a money-decree Doctrine of merger as explained in 
Venakata v. Rainiah Difference between money-decree and decree for 
specific enforcement of lien Rights of puisne incumbrancers Cases on the 
point Case of more than one incumbrancer Law oi Procedure Knowledge 
of subsequent incumbrances not essential Who ought to be made parties to 
the suit; case of mortgagor, owner of equity of redemption, person with 
contingent interest, execution-purchaser and Mitakshara father Doctrine of 
virtual representation Cases on the point Rights of an absent transferree 
of equity of redemption Gopibundhoo v. Kalipodo Sale by puisne incum- 
brancer Rights of the first buyer of the equity of redemption Baijnath v. 
Gobardhan Right of redemption of an absent interested party Account of 
mortgage debt Practice of mofussil courts Mortgagee not entitled to sell 
equity of redemption under money-decree Right of transferee to redeem 
purchaser Cases on the point Mortgagee sells the property discharged of 
his own lien Nature of a simple mortgage Purchase by mortgagee Criti- 
cism of Bombay cases on the point Law of execution Practice of Con- 
tinental courts Right passing under a sale Relation of second to subsequent 
mortgagees Effect of clause against alienation in mortgage deed Breach 
of such a clause valid to what extent Roman law on the point Lis Pendens 
Provisions of the Procedure Code Right of prior mortgagee to sue for 
re-sale of property Mortgagee not bound to proceed against pledge Rela- 
tive rights of the parties Practice of the Court of Chancery Exceptional 
cases Case of portion of mortgaged premises converted into money Joint 
mortgage by two or more mortgagors English law on the point Right of 
one of several mortgagees to sue Suit for foreclosure Mortgagee free to 
proceed against any property to what extent Limitation of this ri<;lit 
Section 271 of Act VIII of 1859 Mortgagee may waive his rights Fakir 
Bux's case Decree upon a simple mortgage a decree for money Right of 
court to restrain mortgagee in case of collusion Section 287 of the Civil 
Procedure Code Section 295 how construed Remedies of mortgagor Sale 
of property "subject to mortgage "Section 271 of Act VIII of 1859 
Defence of bond Jide purchaser for value without notice not available Roman 
law on the subject Cases on the point Right of simple mortgagee a real 
right Statutes of limitation Period within which security must be enforced 
Court in which mortgagee must sue Conflicting decisions Question of 
pecuniary jurisdiction. 

A SIMPLE mortgage is a mortgage in which the land 
is pledged as a collateral security, the right of the creditor, 
in default of payment, being limited to a sale by judicial 
process of the land hypothecated to him. -In this kind 



NATURE OF SIMPLE MORTGAGE. 119 

of mortgage the personal liability of the mortgagor is LECTURE 
not excluded. It corresponds to the hypothecation of the 
Civil Law and the systems which are founded upon it. 
In a pure simple mortgage the mortgagor is not put What con- 
into possession of the property pledged to him. He ^1* 
has not, therefore, the right to satisfy the debt out of mortgage. 
the rents and profits, nor can he acquire the absolute 
ownership of the estate by foreclosure. 

To borrow the language of English law, a simple mort- Simple 
gage is in the nature of an ' equitable lien.' It does not J,e tg u *^ 
vest any ' estate ' in the mortgagee, but only creates a lien ble lien, 
as incident to the debt (Nadir Hossein v. Boboo Pearoo, 
XIX Suth. W. R, 255; cf. 259). Notwithstanding the 
hypothecation, the mortgagor remains the owner of the 
property, and may deal with it in any manner he pleases 
not inconsistent with the conditions of the mortgage. But 
subject to the charge created by the mortgage, he may 
alienate his property either by gift, sale, by a second 
mortgage, or otherwise. (Per Turner, J., in Akhe Ham v. 
Nand Kishore, I. L. R., I AIL, 236 ; cf. 244.) 

A simple mortgagee in this country is not entitled to 
appear at a revenue-settlement either as a claimant or 
otherwise, nor can he sue for a partition (Sheik Torabali v. 
Khoda Buksh, N.-W. P., 1853, p. 489; Kussoo Beg v. 
Thakoor Bhowanee Singh, N.-W. P., 1855, p. 453). A 
simple mortgage, strictly speaking, consists of two parts, 
a covenant on the part of the mortgagor to pay the 
debt and an agreement empowering the mortgagee to 
realize his money out of the property pledged as a 
collateral security. The pledge, however, does not direct- 
ly confer on the mortgagee the power of sale. He 
must obtain a decree directing a sale in order to make 
his security available for the purpose of discharging 
the mortgage-debt. In the case of a simple mortgage, 
therefore, the mortgagee has, generally speaking, on the 
default of the debtor, a two-fold cause of action, the one 
arising out of the breach of the covenant to repay, and 
the other arising out of the hypothecation. He is at 
liberty to sue the mortgagor on both the causes of action 
in one suit at once, or he may pursue the one remedy at one 
time, and the other at another (a). If the mortgagee sues 

(a) His right to do so is, however, subject to the provisions of sec. 43 
of the Civil Procedure Code, the effect of which will be discussed 
later on ; Cf . sec. 99 of the Transfer of Property Act. 



120 



LAW OF MOETGAGE. 



Really 
comprises 
two trans- 
actions. 



LECTURE ou the covenant only, he obtains what is known as a money- 
Iy> decree ; if he sues on the contract of hypothecation only, 
he obtains merely an order for the sale of the property 
pledged to him. But if, as is generally the case, he sues on 
both the causes of action, he obtains a decree for the 
money, with a declaration that he is entitled to have it 
satisfied by the sale of the land. 

A simple mortgage, therefore, in reality comprises two 
transactions, which are distinct from one another. It 
imposes a personal liability for the debt on the obligor, 
while it effects, at the same time, a mortgage of the debtor's 
property, thus creating a personal as divisible from a 
property obligation, the loan being separable from the 
hypothecation. This distinction is clearly pointed out 
in those cases, in which questions have been raised as 
to the right of a simple mortgagee to bring an action for 
debt where the instrument of mortgage was inadmis- 
sible in evidence under the Registration Act as embodying 
a transaction affecting land. (Luchmeput Singh Dugor 
v. Mirza Eharial Ali, IV Ben. L. Rep., F. B., 18 ; Vallaya 
Padayachy v. Moorthy Padayachy, IV Mad., H. C. Rep., 
174 ; Tukoram Vithoji v. Klmndoji Malhorji, VI Bom., 
H. C. Rep., 0. C., 134 ; Sangappahin Nangappa v. Basappa, 
Bin Parrappa, VII Bom., H. C. Rep., A. C., 1 ; Raja Balu 
v. Krishnarao Ramchandra, I. L. R., II Bom., 273 ; 
Krishtolal Ghose v. Bonomali Roy, I. L. R., VI Cal., 611 ; 
Sheo Dial v. Prag Dat Misser, I. L. R., Ill All., 229 ; 
Ulfatunessa Allahijan v. Hossain Khan, I. L. R., IX Cal., 
520 ; in the last case, however, the decision turned upon a 
somewhat different point.) 

But the transaction may not always be divisible, and 
difficult questions of construction often arise owing to 
the loose manner in which mortgages are drawn up 
in this country. Legal experts are very seldom employ- 
ed in India, and the most important documents are 
prepared by persons of little education and with as 
much knowledge of the law as the traditional village 
schoolmaster of the English bar. The consequence of 
this state of things is, that a great deal of most expensive 
litigation arises out of questions of construction of 
extremely ill-drawn deeds, which could have been easily 
avoided by the employment of experts to make them. 
This is well illustrated in some recent cases to which I will 
ask your attention. In the case of Mutungini Dasseee v. 



Questions 
of con- 
struction. 



QUESTIONS OF CONSTRUCTION. 121 

Ramnarayan Sadkhan, (II Cal. L. Rep., 428), the mortgage- LECTTTBE 
bond, after setting out a list of properties belonging to IV> 
the defendant, proceeded as follows : " I borrow the sum of 
Us. 100 from you on mortgage^ thereof (of the land before 
mentioned) with interest at the rate of 24 per cent, per 
annum, which interest I shall pay monthly, and shall 
repay the whole amount within the 23rd of Chytro of 
this year (April 5th, 1875). In default of my paying the 
debt within the term aforesaid, you shall have to get the 
mortgaged property sold by instituting legal proceedings. 
Should the sale thereof not cover the whole amount, 
you shall have to realize the balance by having my other 
landed properties disposed of. On the above condition I 
do hereby execute this mortgage-deed, having mortgaged 
the above piece of land, together with the title-deeds 
thereof." The Court held that the document was not divi- 
sible, as it disclosed only one transaction, and was therefore 
not admissible in evidence even in an action only for the 
money secured by the mortgage. The learned judges also 
expressed a very serious doubt whether having regard to 
the terms of the loan, the defendant was at all personally 
liable for the money, and whether the only remedy of the 
plaintiff was not against the mortgaged property. At 
any rate, the personal liability which was to arise 
only in the event of there being any balance after the 
sale of the mortgaged properties could not be dissociated 
from the hypothecation. (See also Jogeswar v. Nitai- 
chand, IV Ben. L. Rep., App. 48, where a decree was given 
only against the defendant's movable property. But see 
Umasundari v. Uma, VI Ben. L. Rep., App. 117.) 

The recent case of Miller v. Ranga Naih Mowlik, (I. L. R., Miller v, 
XII Cal., 389) also furnishes another instance of the jjy 
embarrassments which arise when you have to deal with 
badly-drawn instruments. In that case the mortgage-bond 
provided as follows : " If the executants thereof fail to 
pay the money, according to the terms thereof, the creditor 
shall immediately institute a suit and realize the debt by 
the sale of the mortgaged property ; and that if the pro- 
ceeds of the sale fall short, from the personal and other 
properties of the mortgagors." It was contended and the 
contention undoubtedly received some colour from the 
language of the instrument that no action could be 
brought to make the mortgagor personally liable till a 
suit had been brought on the mortgage, and an endeavour 



122 LAW OF MOETGAGE. 

LECTURE made to realise the debt by the sale of the property 
IV - pledged to the creditor, but the Court was of opinion that 
the contention was not well-founded, the bond pro viding,how- 
ever inartificially, for two remedies by means of one and the 
same suit, although both the remedies were not to be simul- 
taneously available the personal remedy against the mort- 
gagors being available only in the event of the first remedy 
ugainst the mortgaged property being found insufficient. 

I have said that a simple mortgage does not, as a rule, 
exclude the personal liability of the mortgagor ; whether 
it does do so or not in any particular case must depend on 
the terms of the document, and if the language employed 
in it is such as to create only a hypothecation, the mort- 
gagee will not be entitled to sue the mortgagor personally 
for the debt. 

Personal In the case of Noratum Das v. Sheo Perqush Singh, 
th? mo y rt- f ( T - L -. R -> X Cal " 740), their Lordships of the Privy 
gagor. Council were called upon to construe a document which 
commenced by stating that the mortgagor had borrowed 
the sum of Us. 4,100 at a certain rate of interest. It then 
went on to say: " I have by this instrument hypothecated 
the whole of my property in Taluk Chandipore, situate in 
Fyzabad. As the aforesaid Taluk of Chandipore Birhar is 
under management under the Encumbered Estates Act, 
and I have already filed in the office of the Superintendent 
a schedule of my debts specifying the names of my 
creditors, I do hereby promise and give it in writing that 
I shall without any plea repay the principal, with interest, 
within the term of two years. The mode of payment will 
be, that after paying up the scheduled debts, I shall first 
of all pay up the debt covered by this bond, including 
interest. I shall thereafter appropriate the profits of 
the estate and attend to the liquidation of other debts. 
I shall not take the profits of the estate, without paying 
up the present debt with interest ; if I do take the 
Noratum v. profits, it will be for the payment of this debt. I shall, 
qush Per " un til this debt is repaid, abstain from contracting other 
debts from the bank or anywhere else. When my estate 
is released from management under the Encumbered Estates 
Act, I will immediately, first of all, pay the debt due to the 
said banker, and will pay the other creditors afterwards. In 
both cases that is, while the estate is under management 
and after it is released the repayment of this debt will 
be the subject of my first consideration. In the eventof any 



SIMPLE MORTGAGE. 123 

breach of contract taking place on my part, the said banker LECTURE 
is at liberty to institute a suit within the time fixed in this Iv - 
bond and recover the money. I will not transfer or mort- 
gage to any one the hypothecated property till the principal 
and interest of this debt is paid up ; if I do so it will be 
illegal. These few lines have, therefore, been written as 
an unconditional bond hypothecating my property, so that 
it may serve as a document, and be of use when required." 

It was contended on behalf of the mortgagee that the 
instrument contained a promise to pay distinct from the 
hypothecation, and that an action could, therefore, be 
maintained to make the mortgagor personally liable for the 
debt ; but their Lordships were of opinion that, looking at 
the whole of the deed, they could not place any other 
interpretation upon it than that it was a mere hypotheca- 
tion of the taluk and nothing more. 

No particular form of words is necessary to constitute a Whatcon- 
sirnple mortgage. But it must contain, either expressly or gj ltu i es 
by implication, a right to convert the security into money, mortgage, 
without which the transaction, whatever else it may be, 
cannot certainly be called a simple mortgage. Difficulties, 
however, as I have already had occasion to observe, not 
unfrequently arise owing to the extremely inartificial 
language of Indian instruments. In the case of Gunga 
Persad Singh v. Lalla Behary Lall, (S. D. A., 1857, 
p. 825), in which the question arose whether a bare covenant 
by the debtor not to alienate his -property till the debt 
was repaid, constituted a simple mortgage so as to confer 
a real right on the creditor, the Court observed : " As 
a general rule, we adhere to the principle laid down in 
the case of Chunder Kishore Surma (9th July, 1855), 
that the title of a person who purchases in good faith is 
not vitiated by any contract into which the vendor may 
have previously entered with a stranger binding himself not 
to alienate his property. If a party is desirous of obtaining 
a valid lien on any particular property, he should adopt the 
simple means which the various kinds of mortgage in use 
in this country afford. If he does not choose to do so, the 
fault is his own, and the innocent purchaser should not 
be made to pay the penalty of his negligence." (6) 

(5) It must be observed that this is a different question from that of 
the validity of a mortgage in which no specific property is pledged. To 
constitute a mortgage there must be operative words in addition to a 
specific description of the property. 



124 LAW OF MORTGAGE. 

LECTUEE It may, no doubt, be said that such a doctrine would 
IV - very frequently defeat the intentions of the parties ; but 
intention the rule of construction founded on the presumed intention 
of the of the parties, unless carefully fenced in, is calculated to 
parties. introduce the very greatest confusion. It would carry me 
much beyond the limits of the present lecture to examine 
the various aspects of this doctrine, and there are, probably, 
many among you who are familiar with the controversies 
on the point in some famous writings, both ethical and juri- 
dical. The rule, however, has an undoubted air of plausi- 
bility, and the fallacy which lurks in it is betrayed only on 
careful examination. It is true that if the intention can be 
collected from the instrument, the form of expression is not 
material. But the real difficulty lies in collecting the in- 
tention when it is not formulated in apt words. 
Agra cases In the Reports of the Agra High Court you will find 
point! 6 two cases, in one of which the Court thought that the 
debtor intended to create a mortgage, while in the other, 
it was held that there was nothing to show any such 
intention. The language of the two instruments, how- 
ever, so far as can be gathered from the report, was 
almost precisely the same, the debtors covenanting with 
their creditors in both the cases not to alienate their pro- 
perties till the debts due to the creditors should have been 
repaid. (Chunny Loll v. Pallowun Sing, IV Agra 
H. C. Rep., 217 ; Martin v. Purrissram, II Agra H. C. 
Rep., 124. See also Bolakeelal v. Bungsee Singh, VII 
Suth. W. R., 309 ; Ram Gopal v. Ram Dutt, XII Suth. 
W. R., F. B, 82; cf. VII N.-W. P., 124; VIII N.-W. P. 
669.) The caustic observations of Fearne on Perrin v. 
Blake, will suggest themselves to every one familiar with 
the writings of that accomplished lawyer. I should men- 
Bombay tion that according to some recent authorities, to con- 
stitute a simple mortgage, the power of sale conferred 
by it should be one capable of being exercised without 
the intervention of a Court of Justice. A document is 
not, it has been said, necessarily a mortgage simply 
because it is so styled, nor is a recital that the land 
" stands security " for the money borrowed, sufficient to 
create a mortgage. The property, too, may be spoken of 
as mortgaged ; but even then the transaction might not be 
a mortgage. In such cases the creditor would have only 
a charge upon the property within the meaning of section 
100 of the Transfer of Property Act. He would have the 



POWER OF SALE. 125 

right, it is true, to have his charge realized by sale under LECTUBE 
a decree, but he would not be a mortgagee, no power being IV> 
given to him, either expressly or by implication, to sell the 
property out of Court. Until, therefore, he obtains a decree 
against the land, no interest in it is transferred to him 
such as is transferred by a power of sale in an ordinary 
mortgage. (Khemgi v. Rama, I. L. R., X Bom., 519. Cf. 
Oopal Pandey v. Parsotum Dass, I. L. R., V All., 121. 
But see Sheoratan v. Mahipal, I. L. R., VII All., 258, 
F. B. ; Bishen Doyal v. Udit Narayan, I. L. R., VIII 
All., 486 ; Oovind v. Kalnaclc, I. L. R., X Bom., 592.) 

I am, however, bound to say that very few mortgages, Power of 
if any, at least in this part of the country, confer a power 8ale - 
of sale without the intervention of a Court of Justice. 
Indeed, as the law stood before the passing of the Transfer 
of Property Act, such a power was of very doubtful vali- 
dity in cases not governed by the English law, and now by 
Statute the power is, as a rule, incapable of being exercised 
in the mofussil. If, therefore, the broad rule laid down by 
the Bombay High Court is accepted as law, documents 
which we have been hitherto in the habit of regarding as 
simple mortgages, must no longer be viewed in that light, 
but should be treated as creating only charges upon land. 
I may also mention that a power of sale, even under an 
order of Court, is not always expressly given in mortgage- 
deeds, and has, in many cases, to be inferred from the lan- 
guage of the document. But a power of sale without the 
intervention of a Court of Justice is, as might be expected, 
seldom, if ever, given by a mofussil mortgage. The ques- 
tion in the Bombay High Court as to what constitutes a 
mortgage, as distinguished from a charge, arose, however, 
upon the construction of Article 132 of the Limitation 
Act ; but it does not follow that the distinction, if well 
founded for the one purpose, must be equally well founded 
for other purposes (c). 

I will now proceed to discuss the rights of the mort- Nature of 
gagee under a simple mortgage. We have seen that he possessed 
has no right to enter upon possession of the property by simple 
mortgaged to him, or to foreclose the mortgagor's equity mort s a g ee - 
of redemption, and that the only mode in which he can 
avail himself of his security is by a sale, through judicial 
process, of the property pledged to him under a decree of 

(c) See the notes to clause (b), sec. 58 of the Transfer of Property Act. 



126 LAW OF MORTGAGE. 

LECTUBB Court, the mortgagee having, by virtue of the mortgage, a 

IV - preferential right to be paid out of the purchase-money. 
SinTie" According to the usual practice of the mofussil Courts, 
mortgage the mortgagee asks by his plaint for the sale of the mort- 
avaiiabie 5 ^ a e( ^ property, and, if he succeeds, he obtains 'a decree 
for the money due to him, with a declaration that the 
mortgaged property should be sold for the realization of 
the money. It seems that in taking the account, the Court 
is not bound in a suit upon a mortgage to allow the 
plaintiff interest at the rate agreed upon between the par- 
ties after the institution of the suit ; the rate of interest 
after the institution of the suit being in the discretion of the 
Court (Mangniram Marwari v. Dotvlut Roy, I. L. R., XII 
Gal., 569, F. B. ; but see Ord v. Skinner, L. R., VII, I. A., 
196 ; S.C., I. L. R., Ill All., 91 ; Bandaru v. Atchayamtna, 
I. L. R., Ill Mad., 125 ; Dhunput Singh v. Golam Hadi, 
Cory ton's Rep., 12 ; S.C., II Hyde, 106. See also the cases 
collected in a note to page 188 of Belchambers' Practice 
of the Civil Courts). The Court, however, is bound to allow 
interest at the contract rate down to the institution of the 
suit (d). 

Agreement The above observations apply to cases in which, as is 
of interest generally the case, interest at the rate agreed upon is pay- 
' able by the terms of the bond down to the date of the 
realization of the money by the mortgagee. Where, 
however, there is no express agreement as to the rate of 
interest payable after the debt becomes due, interest as 
such may not be claimed by the mortgagee after due 
date ; although compensation may be awarded for the 
use of the money post diem, which may be, but is not 
necessarily, regulated by the rate specified in the deed of 
mortgage. (Dickenson v. Harrison, IV Price, 282 ; A tkin- 
son v. Jones, II A. and E., 439 ; Price v. G. W. Ey. Co., XVI 
M. and W., 244- ; Cooke v. Fowler, L. R, VII H. L, 27.) Cases 
also may arise in which the Court may refuse to give 
the mortgagee any interest as damages, except, perhaps, 
a nominal amount. But the circumstances which would 
justify such a course must be of a very exceptional 
character, as, for example, where the interest which the 
mortgagor contracted to pay was exorbitant or extor- 

(d) On the Original Side of the High Court, however, the practice of 
the English Courts, now embodied in section 86 of the Transfer of Pro- 
perty Act, has always been followed, and interest is allowed at the rate 
specified in the mortgage down to date of decree. 



DECREE FOR SALE. 127 

tionate. The question whether the mortgagee has been LECTURE 
guilty of unnecessary delay in bringing his action may 
also be fairly taken into account in determining the amouut 
of damages or compensation to which he may be entitled. 
But no rigid or inflexible rule can be laid down as to the 
standard by which the damages should be measured, and 
the decision of the question must turn in a great measure 
upon the special circumstances of each case (Bishen Dyal v. 
Udit Narayan, I. L. R., VIII All., 486 ; Juala Prosad v. 
Khumur Sing, I. L. R., II All., 617). 

I have said that a mortgage decree should always direct Nature of 
a sale of the mortgaged property. Difficulties, however, S %\ Q 
occasionally arise from inartificially drawn decrees which 
are well illustrated in some recent cases, in which the 
question arose whether a decree obtained by a mortgagee 
should be regarded as a mere money-decree or as a 
mortgage-decree. (See Harsukh v. Meghraj, I. L. R., 

II All. v 345 ; Janki Prasad v. Baldeo Narain, I. L. R., 

III All., 216, F. B. ; Debi Charan v. Parbhu Din Ram, 
I. L. R., Ill AIL, 388, F. B. ; Mr Chunder v. Afsaroodeen, 
I. L. R., X Cal., 299.) It would serve no useful purpose 
to go through all the various cases on the point which are 
not always easy to reconcile. Indeed, as the construction 
of a document must vaiy according to the varying terms 
employed in framing it, it would be difficult, if not impos- 
sible, to lay down any well-defined rules. The cases, how- 
ever, may be useful as showing the spirit in which our 
Courts are in the habit of reading decrees seldom very artis- 
tically drawn, and not unfrequently absolutely unintelli- 
gible. Tlie leaning of the Court, however, at least in the 
later cases, seems to be in favour of a liberal construction. 

The expression ' mortgage-decree ' which is used in the Mortgage 
mofussil Courts in contradistinction to a 'money-decree,' decree% 
generally means a decree for money as in an ordinary 
action of debt, coupled with an order directing a sale of the 
mortgaged property in satisfaction of the judgment-debt. 
It may, however, in exceptional cases, mean a decree for 
money to be realized in a particular manner, that is, by 
a sale of the mortgaged property, and not otherwise. 
(Solano v. Moran, IV Cal. L. Rep., 11 ; Budun v. Ram, 
I. L. R., XI Bom., 537.) A decree on a mortgage-bond ought, 
however, to be so drawn up as not to restrict the cre- 
ditor only to proceedings in rem, that is, to proceedings 
taken with the object of selling the pledge. Decrees on 



128 LAW OF MORTGAGE. 

LECTUBE mortgage-bonds are also sometimes drawn up with a 
IV - provision that the pledged property should be sold first ; 
the general property of the debtor being liable to be seized 
only in the event of a deficiency. It is to be regretled 
that there is no prescribed form, as the language of the 
decree regulates the mode of execution and often gives rise, 
as we shall presently see, to considerable embarrassment ; 
in some cases, however, the difficulty cannot be avoided 
by the Court as the language of the decree must follow the 
terms of the bond, and it is no exaggeration to say that no 
two bonds in this country are worded alike. 

Right of The mortgagee may bring his suit at any time after 
Default has been made by the debtor ; he may also sue for 
any interest which may have fallen due without suing 
for the principal, if, under the terms of his mortgage, 
he is not entitled to call in the principal money, although 
such a course is sometimes liable to be regarded as oppressive, 
and the mortgagee, if he should sell the mortgaged pro- 
perty under a decree for the interest only, might find 
himself in an embarrassing position when seeking to recover 
the principal. But if the payment of the principal is not 
deferred for any specified time, or in other words, if the 
principal is payable on demand, a suit should not be brought 
only for the interest, but for an account and payment 
of what remains due on the mortgage for principal and 
interest up to the filing of the plaint (Annapa v. Ganpate, 
I. L. E, V Bom, 181)! 

Period of I may mention that in some Courts a period of six 
grace. months is usually allowed to the mortgagor to pay the 
money found due to the mortgagee on his security. This 
indulgence, however, which seems to be borrowed from 
the practice of the English Court of Chancery, is not 
allowed to the mortgagor everywhere, and the propriety of 
extending it to a decree for sale is, perhaps, open to question, 
such a decree standing upon a very different footing from a 
decree for foreclosure (e). Even in England an immediate 
decree for sale is not unfrequently made by the Court. The 
question, however, is not of much practical importance, and 
I have referred to it only to show how very largely, even in 
details, our law of mortgage has been shaped by the prac- 
tice of the English Courts of Equity. 

Rights of It used to be thought at one time that a purchaser under 
a purchaser a (J ecre e on a mortgage which did not direct a sale, acquired 
(e) See, however, sec. 88 of the Transfer of Property Act. 



BIGHTS OF PURCHASER. 129 

no higher rights than a purchaser under an ordinary execu- LECTUBE 
tion. And this vie w.although now negatived by the Calcutta 
as well as the Bombay High Courts, is still adhered to by the un d e r a 
Allahabad and, to acertain extent, by the Madras High Courts, decree not 
In support of the proposition that a sale under a money- 
decree passes to the purchaser only the rights and interests 
of the debtor as they stand at the date of the execution- 
sale, or, more properly speaking, at the date of the attach- 
ment which precedes the sale, it is said that there is a con- 
siderable difference between a suit to enforce the contract 
of hypothecation and an action merely on the covenant. 
A suit to enforce a pledge of land must be brought in the 
Court within the local limits of which the property is situat- 
ed, and to such a suit all persons interested in the equity of 
redemption must be made parties. But an action on the 
covenant only may be brought in the district in which the 
defendant resides, and in such an action only the mortgagor View of the 
is a proper party. The mortgagee has, besides, a right to 
elect the form in which he should proceed ; and if he does High 
not choose to avail himself of the collateral security, the ^ 
execution-purchaser ought not to be allowed to take advan- 
tage of it. The lien can pass by the sale and be used by the 
purchaser for his protection only when the mortgagor elects 
to avail himself of it and takes the steps which are neces- 
sary to entitle him to enforce his pledge (Khub Chand v. 
Kalian Das, I. L. K., I All., 240, F. B.). It has also 
been suggested that where the mortgagee brings his 
action only on the covenant, and gets a money-decree, 
the mortgagor's original obligation is gone transit in rem 
judicatum. A new obligation arises by virtue of the 
judgment and decree, namely, an obligation to satisfy the 
decree which has been passed in favour of the creditor, and 
the mode in which this obligation can be enforced is pointed 
out by the Code of Civil Procedure. The lien which was 
incident to the original debt is extinguished with the con- 
version of the original obligation into a judgment. It is 
said there cannot be two debts, one leviable by execution, 
and the other, continuing to be a charge on the property. 
The original debt is gone transit in rem judicatum. A 
fresh debt is created with different consequences (/). (Per 
Bramwell, B., European Central Railway Co., IV Ch. D., 33.) 

(/) In Drake v. Mitchell (3 East, 251), Lord Ellenborough said : "I have 
always understood the principle of transit in rem judicatum to relate 
only to the particular cause of action in which the judgment is recovered 

R. B. Q., M. . 9 



130 LAW OF MORTGAGE. 

LECTURE But, as you have already heard, both the Calcutta and the 
Iy - Bombay High Courts take an entirely different view. In 
View of (he the Full Bench Case of Syed Imam Mumtazudden Malw- 
Caicutta m ed v. Raj Coomar Dass, (XXIII Suth. W. R., 187 ; cf. 
bay ffigh" 190), Sir Richard Couch, in delivering the judgment of 
Courts." the majority of the Judges, observed : " There is, we 
think, no warrant for holding that, when a sale is under 
a decree for sale, it conveys the rights of both creditor 
and debtor, but that when it is in execution of a 
simple money-decree, only the rights of the debtor pass, 
and the creditor retains his lien. The object of a sale 
of mortgaged property in execution of a decree is not to 
transfer the debt from the debtor to the purchaser of mort- 
gaged property, but to obtain satisfaction out of the secu- 
rity. Thus, whether a decree do or do not direct the sale 
of the mortgaged property, the mortgagee, when he puts 
that property up for sale, sells the entire interest that he 
and the mortgagor could jointly sell." Sir Richard Couch 
then goes on to point out that the mere taking of a money- 
decree does not extinguish the creditor's lien, and that, if 
the lien continues an incident of the debt when it passes 
from a contract-debt into a judgment-debt, as the creditor 
cannot sell the property and retain the lien, it must con- 
tinue in existence, so far as may be necessary, for the 
protection of the purchaser. The same principle has been 
adopted by the High Court at Bombay. In the case of 
Nursi Dass v. Je Jugalkor, (I. L. R., IV Bom., 57), the 
learned Judges say: "We think that the principle now 
recognised by the High Court at Calcutta is the correct 
one, and that it is impossible to hold that the particular 
nature of the right acquired under the sale depends on the 
form of the decree on which the mortgagee has proceeded 
to satisfy his judgment-debt. The idea that the mort- 
gagee only sells under a money-decree the right, title, and 
interest which the mortgagor has, at the time of the sale, 
appears to be a creature of the old Civil Procedure Code. 
What the mortgagee really seeks when he proceeds to sell, 
whether under a decree for sale, or a simple money-decree, 
is to obtain satisfaction out of his security, in fact, to 

operating as a change of remedy from its being of a higher nature 
than before. But a judgment recovered in any form of action is still 
but a security for the original cause of action until it be made pro- 
ductive in satisfaction to the party ; and, therefore, till then it cannot 
operate to change any other collateral concurrent remedy which the 
party may have. See also Bigelow on Estoppel, p. 13i. 



MONEY-DECBEE. 131 

enforce his lien ; and we do not see on what principle it LECTUEE 
can be said that, when the proceeding is in execution of 
a money-decree only, he still retains his lien for enforcement 
qud mortgagee, if the debt be not discharged, by a second 
sale of the same property" (I. L. R., IV Bom., 63-64-). 

I told you that the doctrine, that a sale under a money- What 
decree only transfers the right, title, and interest of the gafe^und'er 
debtor, has also been sometimes attempted to be supported a money- 
on the ground that the passing of a money-decree has the decree - 
effect of extinguishing the lien; but there is very little 
authority in support of t.he proposition ; it being conceded, 
even by the Allahabad High Court that a mortgagee does 
not lose his lien by taking a money-decree. (Khub Ohand v. 
Kallian Das, I. L. R, I All., 240 ; cf. 246. See also Ram 
Churn v. Raghoobeer, XI Suth. W. R, 481 ; Nadir Hossein v. 
Baboo Pearoo, XIX Suth. W. R., 255 ; cf. 259 ; Gopee- 
nath v. Sheosahoy, I Suth. W. R., 315 ; Surwan Hossein v. 
Golani Mahomed, IX Suth. W. R., 170 ; Syed Emam Mom- 
tazudeen v. Rajcoomar, XXIII Suth. W. R, 187, overruling 
Suduth Singh v. Bheemjek, XII Suth. W. R., 572 ; Kokil 
Singh v. Mitterjeet Singh, V Cal. L. Rep., 243.) All these 
cases distinctly recognise the survival of the lien after the 
taking of a money -decree, and there are numerous other deci- 
sions to the same effect in our books. In the English law 
also, the conversion of a debt into a judgment-debt, has not 
the effect of extinguishing an equitable lien incident to 
such debt. It is true that the Court may, if a proper case is 
made out, restrain the holder of the lien from pursuing both 
his remedies simultaneously ; but there is nothing to prevent 
him from availing himself of his lien, if he has not been 
able fully to realize his money upon a judgment for the 
debt (Barker v. Smart, III Beav., 64.) The judgment of 
Baron Bramwell in the case to which I have already refer- 
red only lays down that, if the debt is turned into a judg- 
ment-debt in the absence of a covenant to pay the stipu- 
lated rate till realization, interest would run on the debt 
only as if it were a judgment-debt; but it is no authority 
for saying that the lien will be discharged although the 
debt remains due (Per Pontifex, J., in Janmojoy Mullik v. 
Dasmoni Dassi, I. L. R., VII Cal., 114. See also Feiuings, 
Exp., XXV Ch. D., 338 ; distinguishing Popple v. Sylvester, 
XXII Ch. D., 98). 

In the case of Venkata Nara Summah v. Ramia, (I. L. Doctrine oi 
R., II Mad., 108), it seems to have been contended that, merger. 



132 LAW OF MORTGAGE. 

LECTURE where a decree directs the sale of the mortgaged property, 
IV< the security is merged in the decree ; the contention which 
betrayed a curious misapprehension of the doctrine of 
merger was of course over-ruled. In giving judgment 
Venknta the Court said : " Now, it is quite clear that the decree 
^"immnk ^ & ^ ourt ^ Equity giving effect to the mortgage-security 
v""lt(imia. which it preserves, is entirely different from a judg- 
ment which merges the cause of action. If the decree 
is a substitute for the mortgage, then the mortgage will be 
no longer existing. This result would lead to the destruc- 
tion by a decree of Courts of Equity, of securities intended to 
be given effect to. For if the right to the security under the 
decree only takes the date of the decree, then all securities 
given by the mortgagor after the mortgage of 1864 and 
up to October 1871 (the date of the decree) being prior to 
the decree, the decree-holder would lose the benefit of 
his mortgage. The decree in a moi'tgage-suit is made 
according to the doctrines and practice of Equity, which 
would be utterly inconsistent with merger. It is the settled 
practice, when there is a decree of a Court of Equity for 
sale, and a sale thereunder for the mortgagee if he has a 
legal estate, to join in the sale and conveyance ; the mere 
decree gives no title; it is the sale and conveyance which 
gives title. Again, this doctrine only affects the parties to 
the suit in which the judgment is obtained, if there is a 
suit on a joint and several bill of exchange against one of 
several debtors and against the other separate debtors 
(King v. Hoare, supra, XIII M & W., 494 & 504). The 
defendant in this present case was no party to the original 
suit on the mortgage of 1864, and is neither bound by it 
nor entitled to have any advantage from it. In this par- 
ticular case, it is not necessary to determine whether a 
purchaser under a sale " only " of rights and interest of 
the defendant in the property (section 249, Act VIII of 
1859) under a decree in a mortgage suit acquires not only 
those rights and interest, but also the interest of the mort- 
gagee under tlie mortgage." I may, however, observe that 
there is no express provision in the late or the present 
Code providing for the sale or conveyance of the mort- 
gagee's rights to the purchaser. Sections 223 to 231 of 
the old Code refer to decrees for delivery of possession 
of immoveable property, and section 249 relates to sale of 
rights and interest of the defendant only. However, 
as the sale of the interest of such mortgagee must have 



PUISNE 1NCUMBRANCERS. 133 

been intended to be provided for, and as there is only the LECTURE 
one process for the sale of iraraoveable property under the IV 
Code, I think that the construction put upon the Code 
by the Calcutta High Court is a necessary result, viz., that 
under a sale in execution of a decreee for sale in a mort- 
gage-suit, the right and interest which the mortgagee 
and the mortgagor could jointly sell pass to the pur- 
chaser (Syed Imam v. Raj Coomar Dass, XIV Ben. L. Rep., 
421). 

In the High Court on the Original Side it has been our 
practice to have sales made in execution of mortgage- 
decrees by auction, without the intervention of process 
of attachment. 

The present Civil Procedure Code, section 286, contains 
provisions to enable the creditor and the purchaser to know 
what interest is really to be sold ; but still the question in 
this case is not satisfactorily provided for, and cannot be 
so, until provision is made for the mortgagee joining in 
the conve3 7 ance, or unless effect is expressly given by 
legislation " to the sale by the officer as if the mortgagee 
had joined." 

It is, however, important to observe that a money-decree Money- 
and a decree for the specific enforcement of the lien differ Decree a "or 
in one respect. A money-decree creates a judicial lien specific en- 
only from the date of attachment and the judgment-creditor 
cannot, therefore, seize the property pledged to him under a 
mere money-decree, if it has been previously transferred by 
the mortgagor without bringing an action for the purpose of 
making it available in satisfaction of his debt. A decree 
for the specific enforcement of his lien, therefore, gives the 
mortgagee a somewhat higher right as against transferrees 
of the mortgaged property, for, not only may he disregard 
all alienations made after his decree, but the mortgagee is 
also protected by the principle of lispendens against any 
transfer made after the institution of his suit. A mortgagee, 
who obtains a decree for sale, is, therefore, a judicially 
secured creditor holding a much stronger position than one 
who obtains merely a money-decree. 

Again, it used to be thought that a sale undera mort- Rights of 
gnge in every case passed the property to the pur- 
chaser as it stood at the date of the mortgage, and that cers. 
a decree for sale made in the presence of the mort- 
gagor, but in the absence of the puisne incumbrancers or 
other persons possessing only a qualified interest in the 



134 LAW OF MOHTQAGE. . 

LECTURE equity of redemption, was a good decree, and passed a 
IV> complete title to the purchaser ; although an exception 
seems to have been recognised in favour of a purchaser 
out and out of the equity of redemption. (Gopeenath 
Singh v. Sheosahoy Singh, I Suth. W. R., 315; Ben. L. 
Rep., Sup. Vol., 72.) Now, this view, although it has 
been departed from by the other High Courts, is still 
maintained, to a certain extent, in the Allahabad Court. 
I am, of course, speaking of cases not affected by the 
Viewof the Transfer of Property Act. It would seem that, according 
AUahabad ^ ^ prac ti c e of the Allahabad Court, it is not ab- 
Court. solutely necessary for the first mortgagee to make a 
puisne incumbrancer a party to a suit to enforce his 
security ; and if the property is sold under a decree for 
sale made in the absence of the posterior mortgagee, his 
rights will be defeated, unless he can show some fraud or 
collusion. It is true, that if he is not made a party, he may, 
at any time before the sale, come in and redeem; but if he 
does not do so, and a sale actually takes place, his lien will 
be defeated unless he can show something more than the 
mere existence of his mortgage some fraud or collusion, 
which entitles him to defeat the first incumbrance, or to 
have it postponed to his own. By saying that his lien will 
be defeated, I do not mean to convey the impression that it 
will be absolutely extinguished. It will only be transfer- 
red from the land to the purchase-money, and the pur- 
chaser under the sale will acquire an absolute title so far 
as the second mortgagee is concerned. (Khub Chand v. 
Kulian Das, I. L. R., I All., 240 ; AH Hasan v. Dhirja, 
I. L. R., IV All, 518 ; Sita Ram v. Amir Begam, I. L. R., 
VIII All., 324.) It is not quite clear, however, whether 
the same principle is applied by the Allahabad Court 
to lessees or other persons possessing a qualified interest 
in the mortgaged property. 

The necessity for making all persons interested in 
the equity of redemption either by way of second mort- 
gage or otherwise, parties to a suit by the mortgagee to 
enforce his security, was very fully discussed in the Full 
Bench Case of Syed Mahomed Maumtaz-ud-din by the 
Calcutta High Court (XXIII Suth. W. R., 187), in which 
it was held that a decree not made in the presence of 
persons who, either by way of second mortgage or other- 
wise, have acquired an interest in the equity of redemp- 
tion, is not binding on the latter. 



PUISNE INCUMBRANCERS. 135 

"If there be persons not parties to the suit claiming LECTUBE 
an interest in the property, no form of dealing with the pro- 
perty in their absence can prejudice their rights" (Per naran 
Couch, C. J., in Haran Chunder Gkose V. Dinobundhoo Chunder 
Bose, XXIII Suth. W. R., 190). The rights of such persons, L- 
however, are nowhere defined in the judgment. It is only dhoo base. 
said that the purchaser under a decree made in their 
absence purchases the property subject to their rights. He 
only buys the lien of the creditor and the equity of 
redemption, or such portion of it as resides in the debtor, 
that is to say, the entire interest which the mortgagor and 
mortgagee could jointly sell. It is, therefore, only where 
there are no third persons interested in the property, that 
it becomes absolutely vested in the purchaser, 

The doctrine, therefore, which is to be found in some 
of the cases in the books that a sale by a mortgagee con- 
veys the property to the purchaser free of all subsequent 
incumbrances must now be received with some qualifica- 
tion. A mortgagee is no doubt competent to transfer the 
property to the purchaser in the state in which it was 
pledged to him, but it can only be effected by a sale un- 
der a decree in which all persons interested in the equity 
of redemption are represented. If the sale takes place un- 
der a decree against the mortgagor alone, no complete 
title can pass to the purchaser, if there are others interested 
in the property. 

You must remember that the effect of a mortgage is to Case of 
transfer to the mortgagee only a portion, more or less ex- mor ? ^ 
tensive according to the nature of the mortgage, of the brancer. 
estate possessed by the mortgagor. Such transfer, how- 
ever, does not preclude the mortgagor from dealing with 
the interest which remains in him after the execution of 
the mortgage ; and where the mortgagor transfers, either 
wholly or in part, such interest, the transferree acquires 
against the mortgagee similar rights to those possessed by 
the mortgagor, so far as they are necessary for the protec- 
tion of the interest conveyed to him. It follows that if 
the mortgagee desires to foreclose the mortgagor or to bring 
the property to sale, a purchaser from the mortgagor or a 
second mortgagee will be entitled to redeem the first mort- 
gage, and thus to protect his own interest in the mortgaged 
property. Hence it has been held that to render a decree for 
foreclosure or sale effectual, the mortgagee must make sub- 
sequent purchasers or incumbrancers parties to the suit, 



136 LAW OF MORTGAGE. 

LECTURE at least if he has notice of them or circumstances exist 
IV - which should have put him on inquiry. ( Venkata v. Canna, 
I. L. R., V Mad., 185. See also Venkata, Narsammah 
v. Ramiah, I. L. R., II Mad., 108 ; Nara v. Gulab Sing, 
I. L. R., IV Bom., 83; Kanitkar v. Joshi, I. L. R., V 
Bom., 442 ; Damodar Dev Chand v. Naro Mihadev Kalikar, 
I. L. R., VI Bom., 11 ; Sobhag Chand Golab Chand v. 
Bhai Chand, I. L. R., VI Bom., 193; Naran Purshotom v. 
Dalatram Virchand, I. L. R, VI Bom., 538; Rupchand 
Dagdusa v. Davlatmv Vithalrav, I. L. R., VI Bom., 495 ; 
Radhavai v. Shamrav Vinayak, I. L. R., VIII Bom., 168.) 
It would seem that, according to the practice of the Cal- 
cutta High Court, the question of notice is immaterial. 
Law of (Madhub Thakoor v. Jhoonuck Loll Dass, XII Suth. W. R., 
Procedure, ^5. G un g a G i)i n dMondulv.BaneeMadhubGhose,ltil.Svii\\. 
W.R., 548; No render Narain Singh v. Dwarka Loll Mondul, 
I. L. R., Ill Cal., 397.) But the question is still a moot 
point in the Bombay as well as in the Madras High Court 
(See Sankane Kalana v. Virupakshaha, I. L. R., VII Bom., 
146, and the cases cited above.) The mortgagee, however, is 
bound to make subsequent transferrees parties to his suit if 
he has notice of such transfer or if circumstances exist which 
should have put him on inquiry, and possession is regard- 
ed as sufficient to put the mortgagee on inquiry and to 
fasten him with constructive knowledge of the subsequent 
transfer. It is important to observe that registration is 
regarded by the Bombay High Court as constructive notice ; 
but this rule, which is not in accordance with the English 
law, has not yet been adopted by the other Courts. (See 
Rup Chand Dagdusa v. Davlarao Vithalrao, I. L. R., VI 
Bom., 495 ; Laru v. Gulab Sing, I. L. R., IV Bom., 83 ; 
Radhai Vai v. Shamrao Vinayak, I. L.R., VIII Bom., 168; 
cf. Venkata Narsammah v. Ramiah, I. L. R., II Mad., 
108 ; Venkata Somayazula v. Cannam Dhora, I. L. R., V 
Mad., 184 ; Ganga Dhara v. Sivarama, I. L. R., VIII Mad., 
246.) I may mention that in the English law, registration 
is not by itself notice ; if, however, a person actually search 
the register, he will be deemed to have notice ; but if a search 
is made for a particular period, the purchaser will not, by 
the search, be deemed to have notice of any instrument 
not registered within that period. (Sugden on Vendors and 
Purchasers, p. 761.) A different rule, however, prevails in 
America, and it has been adopted, as you have just heard, 
by the Bombay High Court. 



PARTIES TO THE SUIT. 137 

It seems that according to the English law, knowledge LEOTUBB 
of subsequent incumbrances is not essential, and that a IV - 
person claiming under a judgment of foreclosure or a de- Knowledge 
cree for sale will not acquire a good title as against claim- of subse- 
ants under a puisne title, although the mortgagee had no H"^. 
notice of their existence. But a person who is a party tobnmcesnot 
a suit for sale or foreclosure will be bound by the decree, and es8enual - 
it would be no answer for him to say that other persons who 
had also a right to redeem were not represented in the 
action. Again, a person who is a defendant in his charac- 
ter of mortgagor will be bound by the decree in respect of 
any interest possessed by him in another character, although 
such interest does not appear upon the proceedings. This 
principle, however, does not apply to a person who becomes 
entitled to another interest in the mortgaged estate derived 
from a person, after the decree, who was not a party to the 
suit. A mortgagor, however, may sometimes be bound by 
a decree in an appeal to which he is not a party if his 
interest is identical with that of the sippellant. At any 
rate he cannot get rid of the decree otherwise than by a 
proceeding in the suit out of which the appeal arose (Fisher's 
Mortgage, pp. 680-81). 

It is, therefore, clear, that in a suit by a mortgagee all Who onpht 
persons claiming any interest in the mortgaged premises 'a^^' 16 
should be made parties, and that the rights of such persons the suit, 
cannot be prejudiced by a decree for sale made in their 
absence. But in no case whatever can a person claiming 
a paramount title be effected by the decree. A second or 
other puisne mortgagee may thus foreclose those subse- 
quent, without joining those prior to themselves, nor are the 
owners of prior iucumbrances necessary parties to a suit for 
sale, as the sale is made subject to those incumbrances. ( But 
see sec. 85 of the Transfer of Property Act.) In the case 
of a derivative mortgage, however, the original mortgagee 
should be made a party. The mortgagor of an estate which Mortgagee 
has been pledged as a collateral security is also a necessary a P art J- 
party to a suit for foreclosure against the principal mort- 
gagor, and so also is a surety, although bound only by a 
personal covenant if he has paid off p;irt of the debt due 
from the principal (Fisher's Mortgage, p. 813). In every 
suit for foreclosure or sale, the owner for the time being of owner of 
the whole or any share of the equity of redemption must equity of 
be present, and it is incumbent on the mortgagee where the T t f^ m ^' 
estate has been sold in lots to proceed against all the party. 



138 LAW OF MORTGAGE. 

LECTURE purchasers (Peto v. Hammond, XXIX Beav., 91). In this 
IV - country a purchaser under an execution-sale, if his purchase 
Execution h as n t been confirmed under the Code of Civil Procedure, 
purchaser is not a necessary party, as his title accrues only from the 
nartv ^ a ^ e on wn i c ^ the sale is confirmed under Section 316 of 
the Civil Procedure Code. Under Act VIII of 1859 the 
purchase related back to the date of the sale, and a pur- 
chaser under that Act, although his sale might not have been 
confirmed, was a necessary party to a suit by the mortgagee 
for sale or foreclosure (Bhairob Ckunder Bondopadhya v. 
Showdaminy Debi, I. L. R., II Cal., 141. See also Rameshur 
Nath Singh v. Mewar Jagjit Singh, I. L. R., XI Cal., 341, 
in which latter case, however, the attention of the Court 
was not drawn to the difference between the effect ot a 
sale under Act VIII of 1859, and one under Act X of 1877. 
See also the unreported judgment in second appeal No. 54 
of 1886 decided by Petheram, C. .J. and Beverly, J., on the 
7th December 1886 Kali Dass Mookerjee, appellant v. 
Sheikh Arshad and others, respondents.) 

Party with It must not, however, be understood that every person 
having a contingent interest must be made a party to an 
action by the mortgagee. In England, where the right of 
redemption has become the subject of settlement, it is 
sufficient to bring before the Court the first person entitled 
to the inheritance, and where there is no such person a 
decree against the tenant for life, will, it appears, bind the 
inheritance (Fisher's Mortage, p. 815). In this country the 
widow would seem to be entitled to represent the estate in 
an action by the mortgagee except where the mortgage is 
one by the widow herself, in which case the reversioners 
ought to be made parties (Nugender Chunder Ghose v. 
Kaminee Dossee, XI Moore Ind. App., 241 ; VIII Suth. W. 
R., P. C., 17 ; Mohima Chunder Roy v. Ram Kishore, XXIII 
Mitakshara Suth. W. R., 174.) Similarly in cases governed by the 
Mitakshara, it is sufficient to m:ike the father a party with- 
out bringing in his sons. (Krishnama v. Perumal, I. L. R., 
VIII Mad., 388). 

Virtual re- The question as to how far a person not a party to a 
presenta- su jt will be bound by a decree made in his absence, is fre- 
quently complicated by questions of substantial or virtual 
representation as it is sometimes called, which have intro- 
duced the greatest uncertainty into the law. The topic 
properly belongs to the law of procedure ; but a few words 
on it will not, I trust, be wholly out of place. The general 



PARTIES TO THE SUIT. 139 

rule, no doubt, is that no person can be affected by a LKCTUBM 
decree in a suit in which he is not represented ; but excep- IV. 
tions have been engrafted from time to time upon the 
principle which have had the effect of 'well nigh eating up 
the rule.' It is probable that our Courts have been in- 
duced by a desire to do substantial justice to depart from 
the fundamental principle that no person can be affected 
by a decree made behind his back. But a too excessive 
regard for the interest of the execution-purchaser, which 
has presumably brought about this relaxation of the rule, 
has led to a great deal of uncertainty advantageous only to 
the ' prowling assignee/ and the trafficker in doubtful litiga- 
tion. Those of you who wish to study the subject, will 
do well to consult the following cases, which, however, 
are only a few out of the many that could be cited, and in 
some of which the question of the proper representation of Cases on 
minors in suits by or against them was also involved: Lalla the P int - 
Seetaram v. Rambaksh Thakoor, XXIV Suth. W. R., 383 ; 
Court of Wards v. Maharaja Coomar Ramaput Singh, X 
Ben. L. Hep., 294 ; S. G, XIV Moore Ind. App., 605 ; Ishan 
Chunder Mitter v. BukshAli Soudagar, Marshall, 614 ; S.C., 
Spl. No. Suth. W. R., 190; Sadabut Prosad Shahoo. v. Full 
Bash Koer, III Ben. L. Rep., F. B., 31 ; Baijan Doobey v. 
Brij Bhookun Lall Aivaste, I. L. R., I Cal., 133; Mohima 
Chunder Roy Chowdhry v. Ram Kissari Acharjee Chow- 
dhry, XV Ben. L. Rep., 142 ; Hendry v. Mutty Lall Dhur, 
I. L. R., II Cal., 395 ; Sham Coomar Roy v. Jotton Bibee, 
XIV Suth. W. R., 448 ; Hukeem Bibee v. Khaja Gawhurali, 
V. Wym., 27 ; Hamir Singh v. Mussammut Zakia, I. L. R., 
I All., 57 ; Rajkristo Singh v. Bungshee Mohon Babu, XIV 
Suth. W. R., 448 note ; Sheikh Abdool Kurreem v. Syed 
Jaun Ali, XIV. Suth. W. R. 56 ; Raja Roghoo Nundon 
Singh v. Wilson, XXIII Suth. W. R, 301 ; Mussammut 
Nuseerun v. Moulvi Ameer Udden, XXIV Suth. W. R, 3 ; 
Lalla See Ram v. Ram Baksh Thakoor, XXIV Suth. W. R., 
383 ; Powell v. Wright, VII Beav., 444 at p. 450 ; Cockburn 
v. Thompson, XVIV esey, 321, at pp. 325-26. In the Mat- 
ter of the Petition of Hira Lall Hooker ji, VI. Ben. L. Rep., 
Ap., 100 ; Syud Emam Mumtazuddeen Mahomed v. Ram 
Coomar Doss, XIV Ben. L. Rep., 408 ; Lekraj Roy v. Becha 
Ram Misser, VII Suth. W. R., 52 ; Hunooman Persad Pan^- 
dey v. Mussammut Koonwarree, VI Moore Ind. App., .393, 
at p. 413; Qopee Choron Burral v. Mussammut Lukhee 
Ishivaree Dibia, III Macnaghteu Sel. Rep., 93 ; Deen Dyal 



140 LAW OF MORTGAGE. 

LECTURE Lall v. Jagdeep Narain Singh, I. L. R., Ill Cal., 198 ; 
IV - Assamathem Nissa Bibee v. Roy Luchmiput Singh, I. L. R., 
IV Cal., F. B., 142 ; Shekh Abdoollah v. Haji Abdullah 
I. L. R., V Bom., 8 ; Jathanaik v. Venkatapa, I. L. R., V Bom., 
14 ; Akoba Dada v. Shakha Ram, I. L. R., IX Bom., 429 ; 
Sotish Chunder Lahiry v. Nil Komal Lahiry, I. L. R., XI 
Cal., 45. See also the cases collected in Vithal Doss v. Karson 
Doss, V Bom. H. C. Rep. (0. C. J.) 76. As to the right of 
a Hindu widow to represent the estate, see Oopee Mohon 
Thakoor v. Sebun Koer, East's Notes, No. 64 ; II. Morley's 
Digest, 105. See also the cases cited inLalchand Ramdayal 
v. Gumtibai, VIII Bom. H. C. Rep. at p. 156, 0. C. J. 

I will now proceed to consider the rights of transferrees 
of the equity of redemption if the property under mort- 
gage is sold in their absence. It will be convenient to 
discuss in the first place the privileges of subsequent in- 
cumbrancers and then those of other transferrees of the 
rights of the mortgagor. 

Eights of The rights of the puisne mortgagee were discussed 
transferee t>y the Calcutta High Court in the case of Gopibun- 
of equity dhoo Shatra v. Kalipuddo Banerjee (XXIII Suth. W. R, 
of redemp- 333) j n t ] ia t case ^e debtor having mortgaged his 

tion, ' . , p 

property to two persons in succession, the first mort- 
gagee brought a suit and obtained a decree but only 
against the mortgagor. The property was afterwards 
sold under the decree and purchased by the mortgagee 
himself. The second mortgagee also sued the debtor, and 
the property was again sold under his decree and 
Gopibun- purchased by the creditor. The Court held that the pur- 
dhu Shatra chaser under the first decree was entitled to possession ; 
but that, as the puisne mortgagee was not a party to the 
decree under which the purchaser acquired his title, the 
purchaser under the second decree had a right to pay off 
the amount due under the first mortgage, and that upon 
such payment he would be the "holder of the first charge" 
on the property. You will observe that this case recognises 
the right of a puisne incumbrancer to pay off the debt on 
account of which the estate may have been sold, and thus 
to treat the purchaser as the owner of the estate subject 
to his claim. As to the question of possession, the Court 
held that the right to the possession of the property was 
vested in the debtor and passed to the purchaser under the 
first execution. I shall try to illustrate the principle laid 
down by the Court by putting a hypothetical case. 



RIGHTS OP ABSENT TRANSFERREE. 141 

Suppose an estate is worth Rs. 20,000, and that it is raort- LECTUBK 
gaged first to A for Rs. 15,000 and then to B for Rs. 3,000. IY - 
The interest which remains in the debtor after the execu- 
tion of the two mortgages is, therefore, worth only 
Rs. 2,000. Now, suppose the property is sold by A in exe- 
cution of a decree against the debtor and in the absence 
of B. Th purchaser purchases only the lien of the cre- 
ditor and the right of redemption subsisting in the debtor, 
which together is by the hypothesis worth Rs. 15,-COO, 
plus 2,000, = Rs. 17,000. Now B would have a right to 
pay off the debt due under the first mortgage, and to 
treat such payment, together with the amount due to him, 
as a charge on the property, i.e., by paying off to the pur- 
chaser the fifteen thousand due under the first mortgage, 
he would acquire a charge on the property for Rs. 15,000, 
plus 3,000, = Rs. 18,000. But, in order to enforce that 
charge he would have to bring a suit against the purchaser 
who, as we have seen, has acquired the right of redemp- 
tion of the debtor. Now, if the purchaser pays him off, 
he acquires an absolute title to the property. But in that 
case he would have to pay altogether Rs. 17,000 minus 
15,000, i.e., Rs. 2,000, plus 18,000, = 20,000, which we have 
assumed to be the value of the property. But suppose 
the purchaser does not choose to pay off the consolidated 
charge on the property, the property must be sold, and 
assuming that it fetches its proper price, the mortgagee 
gets Rs. 18,000, and the purchaser gets back the two thou- 
sand rupees which he had paid. If the property is so 
heavily burdened that the right of redemption is worth 
nothing, the purchaser would not be safe in paying any- 
thing for it in excess of the debt due under the first mort- 
gage. To that extent, however, he would be secure against 
the claims of subsequent incumbrancers. If the purchaser 
pays less than the amount of the debt secured by the first 
mortgage, he may not perhaps be able to insist upon the 
second mortgagee paying to him anything in excess of the 
purchase money, although I am not to be understood as 
saying that the case would not be different if the creditor 
himself became the purchaser. 

When a second mortgage is created in favour of any Sale by 
person, he becomes entitled to pay off the first mortgage or P" 1 ^ 
to sell the property subject to the prior security ; and this brancer. 
right is not destroyed by the acquisition by the first 
mortgagee of the right remaining in the owner after the 






142 LAW OF MORTGAGE. 

LECTURE creation of the second mortgage as his right to call for a sale 
IV. of the property, subject to the rights of the prior incum- 

brancer, cannot obviously be defeated by a transaction to 

which he is no party. A sale by a puisne incuinbrancer, 
therefore, will pass to the purchaser whatever rights re- 
main in the owner ; and if the right of possession has not 
been parted with, the sale will carry with it a right to 
recover possession of the mortgaged property (Vencata- 
chella Kandian v. Panjanddien, I. L. R., IV Mad., 213. 
See however, Rdmu Ndikan v. Subbaraya Mudali, VII 
Mad. H. C. Rep., 229). If, however, the first mortgagee is 
in lawful possession by virtue of his agreement with the 
mortgagor or otherwise, his possession cannot be disturbed 
by a purchaser under a second mortgage. (Mudhun Mohun 
Dass v. Gokul Doss, X Moore Ind. App., 563 ; V Suth. 
W. R., 91 ; Maghunath Prosud v. Jurawar, I. L. K, 
VIII All., 105.) As between two purchasers, the right of 
possession is determined by the priority, not of the respective 
mortgages, but of the respective sales, provided, of course, 
that the possession continued with the mortgagor when 
the property was first brought to sale. (Nanack v. Teluck, 
I. L. R., V Cal, 265 ; Dirgopal v. Bolakee, I. L. R., V Cal, 
269.) 

Rights of It follows from what I have said that the person who 
buyerof ^ rs ^ b uvs ^ e equity of redemption will be entitled in his 
the equity character of transferree to redeem all mortgages on the pro- 
of : redemp- perty (> amo dur Devachand v Mahadev, I, L. R., VI 
Bom., 11.) 

I may mention that it is not usual in the mofussil where 
a puisne mortgagee is a party to take an account of what 
is due to him on his security. It seems, however, that a 
different practice is observed on the original side of the 
High Court, which may well be followed in the moffusil 
Courts. (Auhindro Bhoosun Chatterji v. Chunnoo Lall 
Johnny, I. L. R., V Cal, 101.) 

The principle applicable to subsequent mortgages has 
been extended to other persons possessing a qualified in- 
terest in the equity of redemption lessees, for instance, 
holding under beneficial leases created subsequently to the 
mortgage. 

As I have already pointed out, the fact of the existence 
of a first mortgage is no bar to the creation of a second 
mortgage or to an alienation of the whole or a part of 
the interest of the debtor, subject to the first mortgage. 



RIGHTS OF THE BUYER. 143 

If, therefore, the mortgagor carves a tenure out of the rnort- LECTUEB 
gaged property, the Court cannot in the absence of the IV - 
tenant sell anything except the rights of the creditor and 
the outstanding right of the debtor, namely, the right of 
the former to a charge on the land and of the latter to 
the reversion. The tenant, therefore, cannot be affected 
by a sale conducted behind his back, nor can the purchaser 
disturb his possession. (Kokil Sing v. Dulichand, V Cal. 
L. Rep., 243.) 

A similar rule was laid down in the case of Baij Nutli Bay Nath 
Sing v. Gobordhone Loll (XXIV Suth. W. R, 210), in which f "/ G - 

, . bordhone 

the purchaser at a sale by the mortgagee sought to set aside Lull. 
a lease created by the mortgagor after the mortgage. The 
lessee was not a party to the suit by the mortgage creditor, 
and the order directing the sale was made in his absence. 
It was contended, on behalf of the purchaser under the 
execution, that the lessee was not a necessary party to the 
suit, and that as the lease had been executed subsequently 
to the mortgage, it was not binding upon the purchaser. 
The Court, however, held otherwise, being of opinion that 
the sale did not pass the property absolutely to the pur- 
chaser, and that the rights of the lessee who claimed an 
interest in the property could not be prejudiced by a sale 
under a decree made in his absence. It would, however, 
seem, although the point was not before the Court, that the 
purchaser, as assignee of the lien of the creditor, would 
have a right to insist upon the lessee's redeeming him, and, 
on his failure to do so, to sell the property, the purchaser 
being entitled to a charge for the price paid by him on the 
proceeds, to the extent of the lien of the mortgagee who 
first put up the property to sale ; and this would seem to 
be the only course open to the purchaser if the mort- 
gage-security was impaired by the creation of the term. 
The price paid by the purchaser will, as you have just 
heard, be a first charge on the property. The tenant would 
then have a right to be reimbursed out of the proceeds, 
the purchaser obtaining the surplus, if any, as represent- 
ing the value of the outstanding right in the mortgagor. 
Under the law as it stood before the Full Bench ruling 
in Haran Chunder Ghose's case (XXIII Suth. W. R., 187), 
the sale by the mortgagee would have avoided the lease, 
and the right of the .tenant would have been confined to 
the surplus proceeds of the sale. (Brojo Kislioree Dassee 
v. Mahomed Salim, X Suth., W. R., 151; I Ben. L. Rep., 



144 LAW OF MORTGAGE. 

LECTCBK A. C., 154. See also Raj Narain Singh v. Sheera Mean, 
IV- VII Suth. W. R., 67; Beejoy Gobind Bural v. Bheekoo 

Roy, X Suth. W. R., 291.) 

Right of I have already said that the effect of not making a 
redemption p eraon W 1 1O nas an interest in the equity of redemption a 
absent in- party, would be to let him in to redeem. It seems that 
terested at one ^ me some reluctance was felt by the Court in carry- 
ing out this principle to its logical consequences and the 
case of Moihura flath Paul v. Chunder Money Dabee 
(I. L. R., IV Gal., 817) is sometimes cited as an autho- 
rity that it is not always necessary to make the trans- 
ferree a party defendant in order to bind his interest. 
But that case was very peculiar in its circumstances, and 
the purchaser, at the sale by the mortgage, was the holder 
of a subsequently created putnee who was in actual posses- 
sion of the property, but it was neverthless sold under the 
decree to which he was no party, although he had, equally 
with the donee of the original mortgagor, a right to be repre- 
sented in the suit. The putneedar in that case was in a man- 
ner forced to make the purchase for the protection of his 
own putnee rights. As between him and the donee the 
Court seems to have thought that there was an equity in his 
favour overriding the claims of the donee. It must also 
be noticed that the rights of the donee were expressly re- 
served, the Court observing that if she could establish her 
title to the property in any suit properly framed for the 
purpose, she would be at liberty to do so (g). 

Account of There appears to be some difference of opinion as to 
^ e P l 'i uc 'p' e n which the account of the mortgage- 
debt should be taken in such cases. In some cases the 
account has been taken on the basis of what has been found 
due under the previous decree. (Mohan Manohwar v. 
Tognuka, I. L. R., X Bom., 224.) In other cases, however, 
the account has been taken on a somewhat different 
basis. (Sheikh Abdoollah Saiba v Hajee Abdoollah, I. L. 
R., V Bom., 8.) I need scarcely point out that the right 
of redemption must, if the mortgagee insists upon it, be 
exercised in respect of the mortgage as a whole, as 
no redemption can be allowed of a part in this any more 

(g) There are, however, some reported cases in which this right does 
not seem to have been given effect to. (Jfhevraj Jusrup v. Lingaya, 
I. L. R., V Bom., 2 ; Sheshgiri v. Salvador, I. L. R., V Bom., 5. But see 
Sheikh Abdoollah v. Haji Abdoolah, I. L. R., V Bom., 8 ; Jatha Naik v. 
Venltatapa, I. L. R., V Bom., 14 ; Mohan Manohwar v. Tognnka, I. L. R., 
X Bom., 224, and the cases cited therein.) 



MONEY DECREE. 145 

than in other cases, although the effect of this might be LECTURE 
to keep alive the right of redemption even of those who 
were parties to the decree, and, therefore, in one sense 
bound by it. 

You have heard that it is not the practice in the mofus- practice in 
sil Courts for the mortgagee, who sues for and obtains a n of " ssl1 
sale of the mortgaged premises, to make a formal convey- 
ance to the purchaser, and yet the property itself, as it 
stood when the mortgage was made, passes to the pur- 
chaser, whatever may be the language of the certificate 
of sale. The mortgagee who puts the Court in motion, 
and at whose instance the property is sold, is estopped 
from denying the title of the purchaser, although he does 
not execute a formal conveyance to the purchaser. (Ravji 
v. Krishaji, XI Bom. H. C. Rep., 139, 142; Kasan 
Dass v. Pranjivan, VII Bom. H. C. Rep., 146, A. C. J. ; 
Shringarpure v. Pethe, I. L. R., II Bom., 662 ; Khevraj 
v. Lingayar, I. L. R., V Bom., 2 ; Sheshgiri Shamvaj v. 
Salvadorvas, I. L. R., V Cal., 5; Sheikh Abdoollah v. 
Hajee Abdoollah, I. L. R., V Bom., 8). It is immaterial 
whether the mortgagee is himself the purchaser, as the 
fact cannot affect the estate which passes by the sale. 
(Damodor Dev Chand v. Naro Mohoder, I. L. R., VI 
Bom., 11 ; Mohan Manor v. Tognaka, I. L. R., X Bom., 
224.) 

Although an equity of redemption is saleable in exe- Mortgagee 
cution under the Code of Civil Procedure, a mortgagee ecUo'sefi" 
is not entitled to sell the bare equity of redemption equity of 
under a mere money-decree (A). We have seen that in u^,^ 1011 
the mofussil whenever a mortgagee sells the property money- 
pledged to him, whether the decree is a mere money- decree - 
decree or a decree for sale of the mortgaged property, the 
mortgagee is estopped from denying that the lien is trans- 
ferred to the purchaser. The evils, therefore, so forcibly 
pointed out by Mr. Justice Macpherson, as attending a sale 
of the bare equity of redemption, cannot arise in the mofus- 
sil. (Kamini Devi v. Mam Lochon Sircar, V Ben. L. Rep., 
450 ; see also Raja Ajudha Ram Khan v. Shama Choron 
Bose, 6th July 1852 ; Supreme Court, Bourke's Rep., 161, 
note.) The only disadvantage under which the mortgagor 
labours is that he does not get the benefit of a period for 
redemption. According to the practice on the original 

(7t) See Sec. 69 of the Transfer of Property Act. 
R, B. G., M. 10 



146 



LA.W OF MORTGAGE. 



Right of 



a sale- 
purchaser. 



LECTURE side of the High Court, the lien of the mortgagee does not 
IV - pass to the purchaser upon a sale under a mere money- 
decree, and the execution of such a decree is, therefore, 
limited to property not comprised in the mortgage. 
( Belchamber's Practice, pp. 336-337. But see Bhugo- 
butty v. Shama, I. L. K, 1 Cal., 337. ) But the mofussil 
practice is different; and, it seems to me, therefore, that the 
observations of some of the learned Judges as to the effect 
of a mortgagee buying the property mortgaged to him in 
the mofussil are based on the erroneous supposition that 
unless the mortgagee joins in the sale so as to pass his 
interest, a sale by the Court would only transfer the equity 
of redemption. 

The next question which presents itself is in respect of 
^ ne terms on which a transferee would be entitled to redeem 
a purchaser at a sale by the mortgagee under a decree made 
J Q ^ e absence o f } ie transferee. In the case of Kassim- 
munnessa Bibi v. Nil Rotton Bose, the Court said in 
determining the terms on which the putneedar should be 
allowed to redeem : Now, " the price paid by the plaintiff 
f r t ne l an d i n dispute when he purchased on the 30th of 
November 1867, may have been either more or less than 
that aggregate amount. If it was more, we think that the 
defendant is entitled to redeem on paying the aggregate 
amount (with interest as hereinafter mentioned) and no 
more ; because it was not her fault that she was not made 
a party to the mortgage suit and she has not received the 
excess. If, on the other hand, it was less, we think the 
defendant is entitled to redeem on paying the amount paid 
by the plaintiff as purchase-money on the 30th November 
1867 (with interest as hereafter mentioned). The defend- 
ant having the alternative of pitying either of the amounts 
referred to, must also pay interest at the rate of 6 per cent. 
per annum for three years preceding the date of the decree 
of the Lower Court upon the capital sum so to be paid un- 
til the date of payment. The defendant will be allowed 
six months within which she must pay these sums, and 
the decree will be, that unless she pays the smaller of the 
capital sums before indicated, together with interest thereon 
as before mentioned, within the said six months, she will 
be foreclosed, and the plaintiff will be entitled to a decree 
for khas possession. If, on the other hand, she makes the 
payment directed within the six months, then, the plaintiff, 
upon such payment, must convey to the defendant all the 



Jtotton 
Bose ' 



EIGHTS OF TRANSFEREE. 147 

interests of the plaintiff in the property/' (Kasaimunnessa LECTUEE 
v. NU Rotton Bose, I. L. R, VIII Gale., 83). But ordinarily IV - 
an account ought to be directed which must be taken in 
the presence of all persons interested in the equity of re- 
demption. In the case of Okhil Singh v. Dooli Ckand, (V 
Calc. L. Rep., 243), the Court said : " The plaintiffs have, 
by their purchase, acquired a first charge for the first mort- 
gagee's lien on the laud ; but the mortgaged property con- 
sisted of many separately defined portions, though there 
was no distribution of the debt, and these have been sep- 
arately sold. How far each purchaser can charge the par- 
ticular portion of the property in which he has acquired an 
interest can only be determined by distributing the debt; but 
for this purpose the proper parties are not before the Court." 

If it were otherwise there might be such a result as 
this : five properties are mortgaged in the lump for rupees 
5,000, and, subsequently, mukurrari grants are made to five 
different persons. The mortgagee sues the mortgagor alone, 
gets a decree and order for sale, andj the properties are 
lotted separately ; Nos. 1 to 3 sell for Rs 2,000 each, and 
the sale stops : the mukurroridars of Nos. 4 and 5 would 
be free of any charge, though they deliberately took sub- 
ject to an undefined charge. Mukurroris 1 and 2 would 
be subject to a charge of Rs. 2,000, and 3 to one of only 
Rs. 1,000, taking them to be sold in this order. Thus, it 
appears that until all parties concerned are brought into 
Court, nothing can be done (Okhil Sing v. Duli Ohand, 
V Calc. L. Rep., 243). 

In the case of Neela Canto Banerjee v. Shooresh Chunder NeeiaCanto 
Mullick, (I. L. R, XII Cal., 414), the High Court having i?f v> 
allowed the defendant, who had purchased only a portion Chunder 
of the mortgaged property, to redeem the plaintiff, who was Mulllck " 
also the mortgagee, on payment only of the price paid by 
him at the execution sale without directing any accounts 
at all ; the Privy Council observed that it was quite a new 
thing to allow the purchaser of a single fragment of the 
equity of redemption without bringing the other purchasers 
before the court to have an account as between himself and 
the mortgagee alone, so that the mortgagee might be paid off 
piecemeal. Such a law, their Lordships observed, would 
result in great injustice to the mortgagee. It would put 
him to a separate suit against each purchaser of a frag- 
ment of the equity of redemption though purchasing 
without his consent; and he would have separate suits 



148 LAW OF MORTGAGE. 

LECTURE against each of them, and suits in whu-h no one of the 

IV - parties would be bound by anything which took place in 

a suit against another. Different proportions of value 

might be struck in the different suits, and the utmost 

confusion and embarrassment would be created. 

But so far from contemplating accounts between all the 
parties concerned, the High Court did not direct any account 
at all ; not even the ordinary account on which a redemp- 
tion decree must be founded. They went at once to say, of 
their own discretion, what should be the price paid for this 
mortgaged property. (Neela Canto Banerjee v. Sooresh 
Chunder Mullick, I. L. K., XII Calc., 423) (i). 

Mortgagee In describing the interest which is transferred to a 
*ro 8 ert e purchaser under a sale by a mortgagee, I said that he obtains 
discharged what the mortgagee and the parties interested in the equity 
of his own Q f redemption who are on the record could jointly convey ; 
but it is pointed out in a recent case (Ram A'ath Dass v. 
Baloram Phookun, I. L. B,., VII Cal., 677), that it would 
be more correct to say that the mortgagee sells the property 
of the mortgagor discharged of his own lien. The Court 
after stating that the Full Bench Ruling in Syed Momtazood- 
deen's case (XXIII Suth. W. R, 186 )had laid down, first, that 
a mortgagee who obtains a decree for sale of the mortgaged 
property cannot sell that property, reserving his own rights 
over it, because such a proceeding would be inconsistent with 
the avowed object of the sale, and, secondly, that if the mort- 
gagee obtains only a simple money-decree, he is precisely in 
selling the property in the same position so far as his own 
interest is concerned as if he had obtained a decree for sale, 
goes on to say " but how can this ruling of the Full Bench 
assist the appellants' argument in this case ? It seems to 
us to be quite beside it. Indeed, the reason of the Full 
Bench seems rather opposed to the appellants' contention. 
Ramnathv. When the mortgagee puts up for sale the mortgagor's 
am - property and sells it, his lien passes with the property, 
because, having regard to the nature and object of the sale, 
the lien is inseparable from the property. 

But when the mortgagee professedly puts up the mort- 
gagor's property for sale, but, in fact, sells nothing, because 

(i) I ought to mention in passing that the above case is also an authori- 
ty for the proposition that a purchaser of the equity of redemption who 
alleges a paramount title and disclaims the right to redeem when the 
mortgagee seeks to enforce his lien and thus causes the dismissal of the 
suit, cannot afterwards set up a claim to redeem. 



RIGHTS OF TRANSFEREE. 149 

mortgagor has no property to sell, why should the LECTURE 
mortgagor's lien pass to the purchaser ? The reason why IV ^ 
it passes in the other case is entirely absent in this; and I 
know of no provision of the law which enables ajudgment- 
creditor, under colour of selling his judgment-debtor's pro- 
perty, to sell his own. 

Besides which, it appears to me, that if the appellants' 
contention were correct, it would defeat the very object of 
the Full Bench, which was to prevent the mortgagee from 
selling the mortgaged property, reserving to himself his 
own lien. 

Suppose a case of this kind. A mortgages a property to 
B, and then sells his own interest to C, B sues A for the 
mortgage-debt, obtains a money-decree, and puts up A's 
right, title, and interest in the property for sale. 

At the same time, B also sues C, praying that the 
mortgaged property in C's hands may be sold to satisfy 
the mortgage-debt ; and he obtains a decree to that effect. 

The sale under the decree against A takes place first, 
and D becomes the purchaser. The property is then sold 
under the decree against C, and E becomes the purchaser. 

Under which sale does the mortgagee's lien pass ? 

If the contention of the appellants' pleader is correct, it 
passes by the first sale, and yet the consequence of this 
would be that E, under the second sale, would have 
bought the mortgagor's property, subject to the mortgagee's 
lien, which would then be vested in D. In other words, 
the mortgagee would thus have been enabled to do that 
which the Full Bench considered to be contraiy to justice, 
namely, to sell the mortgagor's interest for paj^ment of his 
mortgage-debt without giving the purchaser the benefit of 
his own lien." (Ramnath Dassv.BoloramPhookun,!. L. R., 
VII Cal., 681682.) 

It is somewhat remarkable that this very case is put in 
a hypothetical form by one of the learned Judges of the 
Allahabad High Court to show that the lien of the 
mortgagee does not pass to the purchaser under a money- Khubchand 
decree. In the case of Rhubchand v. Kallian Dass (I. L. v - Kaiha. 
R., I All., 240.) Mr. Justice Turner says : " the Calcutta 
High Court allowed that the fact that property is mort- 
gaged to one is no bar to the mortgage or sale of the equity 
or right of redemption to another. Let it be assumed that 
the mortgagor sells his interest absolutely, then, if the 
mortgagee sues on the personal undertaking only,he must sue 



150 LAW OF MORTGAGE. 

LECTURE the original mortgagor, he cannot im plead the purchaser, 
IV - and if he obtains a decree, he can enforce it only against 

the property of the mortgagor who, ex hypothesi, has no 

interest left in the mortgaged property, and if, instead of 
selling the mortgaged property, he sells the property of the 
mortgagor, no interest in the collateral security can pass by 
such a sale to the purchaser (Khubchand v. Kallian Dass, 
I. L.R., IV All., 217.) 

Nature of You will observe that the security acquired by a mort- 
a simple gagee under a simple mortgage is the right to sell the 
e ' entire estate of the mortgagor as it existed at the date of 
the mortgage, free of any charges on the property subse- 
quently created by the mortgagor. The recent authorities 
have made no alteration in respect of the nature of the 
security to which the mortgagee becomes entitled under 
this form of mortgage, the rule laid down by the Court 
being a mere rule of procedure. The mortgagee has still 
the right to sell the entire estate of the mortgagor as it 
existed at the date of the mortgage, but he must take care 
to bring all puisne claimants before the Court. Under a 
decree for sale obtained in their absence, the mortgagee can 
only transfer to the purchaser the benefit of his own lien 
and such interest as may be possessed by the mortgagor 
at the time of the institution of the suit. 

Purchase A mortgagee may, with the permission of the Court, buy 
b a Te rt " ^ ie mor % a g e( i property in execution of his own decree ; 
but it has been thrown out in a recent case that where the 
mortgagee himself is the purchaser, he must prove that he 
paid a fair price for the property. In the case of Hart v. 
Tara Prosonno Mookerjee (I. L. R, XI Cal., 718) the 
Court said : " But it is clear that when a mortgagee has 
sold any portion of the mortgaged property under his decree, 
and has purchased it himself, he is bound, before he can pro- 
ceed further against the mortgagor, to prove that there is still 
a balance due to him, and that the property sold realized a 
fair amount, and this ought to be inquired into most care- 
fully ^ by the Court to which the application to share rate- 
ably is made. _ The mere fact that the property was pur- 
chased at auction is not alone sufficient to prove its value, 
where the mortgagee himself is the purchaser. It would 
manifestly be inequitable to allow a mortgagee to buy in 
the mortgaged property at auction for a surn far below its 
real value, and then to go on against other property of 
the mortgagor to the injury of other creditors." Similar 



PURCHASE BY MORTGAGE. 151 

observations have been made in other cases ; but I am not LECTURE 
aware of any distinct authority for the position that a mort- 
gagee buying with the leave of the Court is in a different 
position from an unsecured creditor, while there are cases 
directly the other way (j). In the case of Mohon Manor 
v. Togoo Wooka (I. L. R., X Bom., 224,) the Court held Bombay 
that when a mortgagee brings to sale the mortgaged pro- case - 
perty, he sells the estate, as it stood at the date of his mort- 
gage, free from all subsequent incumbrances, and the fact 
that the plaintiff is himself the purchaser cannot affect the 
estate which passes by the sale (see also Damodor Dev 
Chnnd v. Mohadev Kelkar, I. L. R., VI Bom., 11). 

It is perhaps idle to expect that the authorities allowing Criticism. 
a puisne mortgagee to redeem in the absence of fraud, not- 
withstanding the opinion of the Allahabad High Court to 
the contrary, will bo reconsidered (k). I may, however, be 
permitted to observe that it is somewhat doubtful whether 
the Courts have not gone too far in their anxiety to protect 
the interests of puisne incumbrancers. It is true that no 
person ought to be affected by an order made in his ab- 
sence. But how is the puisne incumbrancer affected by 
the conversion of the estate into money ? He may have a 
right to the surplus proceeds, and if that is secured to him, 
it is difficult to discover how he can be possibly prejudiced 
by a decree for sale, (see Section 295, Proviso (c), clause (3) 
of the Civil Procedure Code.) In every system of law in 
which the pledgee possesses a right of sale, what he sells 
is the property pledged to him, and not merely an undefined 
interest in the pledge, and no claimants upon the property 
posterior to the first pledgee can interfere with this right. 
(See the observations of Markby, J., in Ha/ran Chunder 
Otiose v. Denobundhoo Bose, XXIII Suth. W. R., 193.) I do 
not deny that very different considerations would arise if 
the mortgagee asked not for a decree for sale, but one for 
foreclosure. A decree for foreclosure stands upon a very 
different footing from a decree for sale, and there is no real 
analogy between the two. 



Court 



(j) As to the effect of a decree-holder buying without the leave of the 
v,ourt,see Rooltni Bullov Uoy v. Brojo Nath Sircar, I. L. R., V Cal. 308 ; 
Javherbai v. Horibai, I. L. R., V Born., 575 ; Mahomed Gazcc Chomdhry 
v. Ram Loll Sen, I. L. R., X Cal., 757 ; MotJioora Dass v. Nathooni Lall 
Mahata, I. L. R., XI Cal., 731. 

(It) For the present state of the law, see sec. 85 of the Transfer of 
Property Act. 



152 LAW OF MORTGAGE. 

LECTUBE There is, besides, another aspect of the question which also 
IV< deserves consideration. It is very seldom, indeed, that an 

LawoT estate sold under an execution realizes an adequate price ; 

execution, and the encouragement offered to speculative purchasers is 
one of the principal sources in this country of a good deal 
of litigation never very healthy, and frequently dishonest. 
It is not difficult to foresee that the result of the recent 
authorities will be to aggravate the evil, and that both 
mortgagor and mortgagee will suffer by the sale of rights 
which must remain to a great extent uncertain and un- 
defined. The mischief is guarded against in other systems 
of law by provisions which, while they secure to the cre- 
ditor his just rights, prevent a needless sacrifice of the pro- 
perty of the debtor. Indeed, in this respect the interest 
of the creditor ought to be identical with that of his debtor, 
as the object of both must be to secure the best possible 
price for the property. Under the law as it was formerly 
understood this could always be effected by a sale by the first 
pledgee, who it was thought could pass the property free 
of all subsequent incumbrances. In the case of a puisne 
incumbrancer the result was, no doubt, different, as a 
sale by him was subject to all prior mortgages. But I 
am by no means sure that even in this case it might not 
be more convenient to allow the creditor to sell the estate, 
the preferential right of the prior mortgagee to the pur- 
chase money being secured to him. I am afraid that the 
suggestion may be regarded as too sweeping, if not al- 
together wild and impracticable; and I am free to confess 
that it is one which I should not have ventured to make 
if I had not found similar provisions in the law of France 

Practice of and other countries, whose jurisprudence is moulded on 
*^ e R man ^ aw - Roughly speaking (for I do not pre- 
tend to give a detailed account) a sale under an exe- 
cution extinguishes all hypothecary rights or debts affect- 
ing the property, the right of the creditor being trans- 
ferred to the purchase-money. For this purpose the pro- 
ceeds of the sale are deposited in the Court, and the 
creditors of the mortgagor are cited to appear and assert 
their claims. A proceeding is then adopted by which the 
respective priorities of the creditors are ascertained, and 
the proceeds divided according to the result of the investi- 
gation. This proceeding is called the prwferentia and con- 
currence of creditors. Its object is to comprise the adju- 
dication and assertion of those claims which are prior 



LAW OF EXECUTION. 153 

or preferred, as well as those which are concurrent. Each LECTUBB 
claim to be preferred or ranked concurrently is regularly 
brought to issue and debated ; and the Court, by its sen- 
tence, declares the order in which the parties are to rank 
on the proceeds. (Code de Proced. Civile, tit. 14; see 
also Barge's Foreign and Colonial Law, Vol. II, pp. 592-93 ; 
Vol. Ill, pp. 229-30.) This is a very simple and intelli- 
gible rule. It secures to the debtor a fair price for his 
property, and thus, as I have already explained, effectually 
protects the interests of the creditor. Trafficking in 
doubtful claims one of the least interesting phases of 
litigation in this country finds no encouragement in such 
a system, while the rights of the creditors are protected 
with a jealousy not less scrupulous than that which we 
find in systems with which we are more familiar (I), 

I have ventured to detain you with this slight sketch 
of the Continental system of execution, not because I 
think there is much likelihood of the introduction of the 
principle into our own law (m) ; but because I think the 
student ought to have some acquaintance with the leading 
features of a system of jurisprudence which obtains in 
a large part of the civilizecl world. A too exclusive 
attention to any one system is likely to induce a habit of 
mind, which I am afraid is to be found in other persons 
besides the learned conveyancer, mentioned by Mr. Justice 
Stephen, who thought that an attempt by the legislature to 
preserve contingent remainders without the intervention 
of trustees, was as absurd as an attempt to alter the laws 
of nature. The worthy conveyancer was only a type of 
a great many lawyers, whose number is perhaps larger 
than is generally supposed, and who believe not only in 
the necessity but also in the sacredness of every techni- 
cal rule, however unreasonable, which they find in the 

(Z) The Hoii'ble Mr. Evans in his speech on the motion to pass the 
Transfer of Property Act, said : " There being no machinery for bring- 
ing together into one suit the various iucumbrances on the property, 
endless confusion had been the result, and the decisions of the Courts 
upon the almost insoluble problems arising from this state of things, had 
been numerous and contradictory. The result was that the mortgaged 
property could not fetch anything like its value. The debtor was 
ruined, the honest and respectable money-lender discouraged, and a vast 
amount of gambling and speculative litigation fostered." 

(wt) An attempt, although slight and imperfect, has been made in this 
direction by the Legislature in section 295 of the Code of Civil Proce- 
dure and sections 57 and 96 of the Transfer of Property Act. I, how- 
ever doubt very much whether these provisions will be availed of largely 
in this country. 



154 



LAW OF MORTGAGE. 



LECTUliE 

IV. 



Rightpass- 
ing under 
sale. 



Relations 
of second 
to subse- 
quent 
mort- 
gagees. 



Whnt in- 
terest 
parses 
under sale. 



system in which they have been brought up, while any 
proposed improvement is sure to be denounced very much 
after the fashion long since held up to ridicule by the 
wittiest writer the English Church has given to the present 
century. 

To return: as the law at present stands, the right 
which passes under a sale by the mortgagee is the entire 
interest which the mortgagor and mortgagee could jointly 
sell. Where the subsequent transferees, if any, are parties, 
and the order for sale is made in their presence, the pur- 
chaser acquires a higher right which may be described as 
the entire interest which the mortgagee together with the 
mortgagor and his transferrees could jointly convey. In the 
case, however, of a second mortgagee, the sale would be suh- 
ject to the prior charges, (Doolal Chunder v. Goluck Monee, 
XXII Suth. W. R., 360) ; but if the first mortgagee is a 
party, as he ought to be, there is no reason why the property 
should not he sold free of all incumbrances, the first mort- 
gagee having a paramount claim on the proceeds of the sale. 
I must, however, admit that, in practice, this is seldom if 
ever done. I may mention that in England, in a suit for 
sale, if the prior mortgagee is a party, he must be re- 
deemed. (Spenee's Equity, Vol. II, p. 671). 

It is scarcely necessary to point out that the second 
mortgagee stands in the same relation to posterior mort- 
gagees that the first mortgagee does to him, and that he 
is, therefore, under the same obligation towards them as 
the first mortgagee is towards him. Thus, a purchaser 
under a sale by the second mortgagee, although he must, 
in any event, purchase, subject to the rights of the first 
mortgagee, acquires a very different estate accordingly as 
the posterior mortgagees are parties to the decree or not. 
If the order for sale is made in their presence, the pur- 
chaser acquires the estate absolutely as against them, but 
if it be otherwise, the purchase is made subject to their 
right to redeem. 

I said that a sale by the mortgagee under a decree 
against the mortgagor conveys to the purchaser the entire 
interest which he and the mortgagor could jointly sell. 
It is necessary to point out that this refers to the interest 
which they could jointly pass, not at the time when the 
property is sold, but at the time of the institution of the 
suit in which the decree under which the property is sold, 
was made. This is a necessary consequence of the doctrine 



RESTRAINT UPON ALIENATION. 155 

of Us pendens, which I shall have occasion to discuss here- LECTURE 
after. I may also point out that the language of section 259 ^ 
of Act VIII of 1859, was perhaps, in strictness, inappli- 
cable to a sale by a mortgagee which takes place under 
a decree for sale, and not under an ordinary execution. 
The right, title, and interest of the judgment-debtor, of 
which the section spoke, were, however, understood in a 
somewhat wider sense than the right possessed by the debtor 
at the time of the sale. As I shall have occasion to explain 
presently, the provisions of Act VIII of 1859, like those 
of the present Code with regard to executions, were far 
from being clear as regards the rights of mortgagees. 

In connection with this subject I may mention that a Effect of 
question may arise, but which, so far as I am awai-e, has c *** at 
not been decided, as to the precise effect of a clause alienation 
against alienation contained in a deed of mortgage. Such in mo ^ t - 
clauses are frequently found in Indian mortgages. I have ga 
already explained that ordinarily a clause against aliena- 
tion does not prevent the alienee from acquiring a title 
to the property. The covenant does not affect the thing 
itself, although in some cases the covenantor may render 
himself liable to an action for a breach of his contract. 
It would, however, seem that in the civil law a clause 
against alienation by the mortgagor is allowed to bind the 
property itself, and a subsequent alienation is therefore 
void. In consequence of this doctrine, the mortgagee 
is not bound to recognise any alienee of the property 
mortgaged to him, if there be a clause against alienation 
in the mortgage. (Burge's Foreign and Colonial Law, 
Vol. Ill, p. 197.) It seems that in some of the earlier cases 
to be found in the books, the doctrine was carried by the 
Indian Courts further than equity or good conscience 
would seem to justify ; but it may be a question whether, 
in the presence of such a stipulation, a decree obtained 
by the mortgagee, and a sale thereunder, although made 
in the absence of persons who had acquired an interest in the 
property subsequently to the mortgage, would not pass an 
absolute title to the purchaser. (Gunga Gobindo Mondul 
v. Benemadhob Ghose, XI Suth. W. R., 548, cf. 549 ; III 
Ben. L. Rep., 172 ; Bhanumutty Chowdhrani v. Premchand 
Neogy, XXIII Suth. W. R., 96; XV Ben. L. Rep., 28.) 
In the absence of any distinct authority, I do not ven- 
ture to offer any opinion one way or the other. I simply 
call attention to the point as one which must not be taken 



156 LAW OF MORTGAGE. 

LECTURE to be decided by the authorities as it does not seem to have 
IV. been distinctly raised in any case. In Khubchund v. 
KhMund Kallian Das (I. L. R., I All, 240) Mr. Justice_ Turner said : 
v. Kaiiian " It remains to be considered whether an auction-purchaser 
Das ' in execution of a money-decree can avail himself of a 
condition in the mortgage deed prohibiting alienation. I 
was a party to the decision of this Court in the case of 
Rajaram v. Benimadhab (N.-W. P. H. C. Rep., 1872, p. 81), 
in which it was held that the existence of such a condition 
enabled the auction-purchaser to resist the claim of a 
second incumbrancer. On fuller consideration I am not 
prepared to support that ruling. The condition is attached 
to the charge, and not to the personal obligation of the 
mortgagor; and if the first mortgagee, who can only enforce 
the charge by suit, elects to abstain from pursuing that 
reined} 7 ", and sues on the personal obligation only, I am of 
opinion that the auction-purchaser cannot plead the con- 
dition attached to the lien any more than he can plead 
the lien. I would reply that Khubchand having purchas- 
ed under a mere money-decree, the interest at the time of 
sale remaining in the judgment-debtor, stands in the place 
of the judgment-debtor in respect of the interest he ac- 
quired by the purchase, and that he cannot resist the claim 
of the plaintiff to obtain possession of the property." 
(Khubchand v. Kalian Das, I. L. R., I AIL, 248). 
Venkaua v. Again, in the case of Venkatta v. Kannum (I. L. R., V 
'' Hum> Mad., 184) the same learned Judge observes : " Where, by 
a condition of the mortgage-contract, he (i.e. the mort- 
gagor) engages to abstain from alienating the interest re- 
maining in him, there is again a conflict of opinion as to 
the effect of the condition in respect of mortgages of im- 
moveable property. In Radha Prasad Jusput v. Monohar 
Las (I. L. R., "VI Cal., 319) it is stated by the learned 
Chief Justice that such a covenant, i.e., an agreement restric- 
tive of alienation, creates only a personal liability as 
between the mortgagor and mortgagee. On the other 
hand, it was held in Chuni v. Thakur Dass (I. L. R., 
I All., 126) that such a condition is operative to the 
extent and for the purpose contemplated by the parties, 
and that a transfer of the interests of the mortgagor is 
voidable,' in so far as it is in defeasance of the rights of the 
mortgagee, and the decision accords with what is declared 
to be the general rule by Mr. Justice Macpherson. This 
decision may be reconciled if it be held that the condition 



RESTRAINT UPON ALIENATION. 157 

binds a purchaser for value only when he lias notice of it, LECTURE 
and that in the one case the purchaser had, and in the other IV - 
he had not, such notice. 

" However this may be, and the point does not call for 
decision in the case before the Court, it is clear that even 
where such a condition has been imported into a mortgage, 
it does not absolutely debar the mortgagor from dealing 
with the interest remaining in him. Where the mortgagor 
has transferred, in whole or in part, such interest, the 
transferree acquires against the mortgagee similar rights 
to those possessed by the mortgagor, so far as they are 
necessary for the enjoyment and preservation of the inter- 
est transferred to him. If the mortgagee desires to fore- 
close the mortgagor or to bring the property to sale, a pur- 
chaser from the mortgagor or a second mortgagee is entitled 
to redeem the first mortgage and thus to protect his own 
interest in the property mortgaged. Hence it has been 
held that to render a decree for foreclosure on sale effectual, 
the mortgagee must make subsequent purchasers or incum- 
brancers parties to the suit, at least if he have notice of 
them or circumstances exist which should have put him 
on inquiry as to the claim by them of an interest in the 
mortgaged property (I. L. R., V Mad., 186, 187.) 

It is necessary to observe that at one time the Courts Breach of 
used to give full effect to a condition against alienation aglinsT' 
(see the cases cited by the Reporter in the note to Chunni alienation 
v. Thakoor Dass, I. L. R., I All, 126); but it is now settled iSJ- 
that a transfer b} r the mortgagor in breach of a condition tent, 
against alienation is valid, except in so far as it encroaches 
upon the right of the mortgagee to realise his security. 
But with this reservation, such a condition does not affect 
the property so as to prevent the acquisition of a valid 
title by the transferee of the equity of redemption. Cove- 
nants against alienation are often introduced in mortgage- 
deeds in this country, and I may add, are as often infringed 
by mortgagors. But such a covenant, although it may 
create a personal liability between the mortgagor and the 
mortgagee, does not render an alienation absolutely void, 
but voidable only in so far as it is in derogation of the 
rights of the mortgagee. In reality, therefore, a mort- 
gagee does not. by virtue of such a covenant, acquire any 
higher rights than he would acquire even if the condition 
was absent, except, perhaps, as regards the necessity of 
making puisne claimants parties. (Radha Prosad Misser v. 



158 LAW OF MORTGAGE. 

LECTUBE Monohur Doss, I. L. R, VI Gal, 317; Chunni v. Tliakoor 
IV - Doss, I. L. R., I All., 126 ; All Hasan v. Dhirja, I. L. R., 
IV All., 518.) But although the purchaser acquires the 
property in the state in which it was mortgaged, it does 
not follow that a lease, for agricultural purposes for in- 
stance, made by the mortgagor in the usual course of man- 
agement, can be avoided by the mortgagee or a purchaser 
claiming under him. (Chunni v. Thakoor Dass, I. L. R., 
I All., 126.) In Banee Pershad v. Rith Bhunjan Singh, 
(X Suth. W. R., 325) in dealing with the contention that the 
plaintiff, as a purchaser under a mortgage-decree, took the 
property free from all alienations or incumbrances created 
subsequently to the mortgage, the Court said : " We appre- 
hend that this proposition is not maintainable in the full 
sense of the words in which it is framed, if the term incuin- 
brance is meant to include such temporary arrangements by 
lease or farm as the owner might find to be expedient or con- 
venient. The mortgagor was restrained from alienating the 
property which he had pledged; but he was not divested of, 
or restricted in, the management of the property, and as long 
as nothing took place which impaired the value or imped- 
ed the operation of the mortgagee's lien, we think that 
the mortgagor in creating a temporary lease acted within 
his powers, and that the purchaser has no legitimate cause 
of complaint." 

Eomanlaw In the civil law, however, as I said, a covenant by the 
oint. 6 mortgagor, that he will not transfer the property pledged by 
him was valid. " A stipulation by the mortgagor that he 
will not alienate, will prevent the alienee from acquir- 
ing a title to it. Generally, a contract not to alienate 
a particular thing affects not the thing itself, but merely 
the person contracting, so as to subject him to an action 
for a breach of his contract. The stipulation added to the 
contract can have no greater efficacy than the contract or 
principal to which it was accessory. It is not so with the 
contract against alienation by the mortgagor, for the mort- 
gage gives a right in the property, and this contract, follow- 
ing the nature of its principal, affects the property, and 
therefore, renders the alienation of it void." (Burge's 
Foreign and Colonial Law, Vol. Ill, p. 197.) 

Lispen- I have already pointed out that the right to possession 

dens. vested in the mortgagor or in a transferee of the equity 

of redemption passes under the first sale, and that, quite 

independently of the question whether the decree under 



SALES BY MORTGAGEES. 159 

which the property was sold was obtained by a puisne LECTUKE 
mortgagee, or even by an ordinary unsecured creditor IV - 
(Ajoodh-i/a Pershad v. Musamat Maracha Kooer, XXV 
Suth. W. R., 224). This rule, however, as you have just 
heard, is subject to one very important qualification based 
upon the doctrine of Us pendeus. If the property is sold 
after an action has been commenced by the mortgagee 
to enforce his security, and, d fortiori, if the sale takes 
place after a decree has been obtained for the sale of the 
mortgaged premises, the purchaser will acquire no rights 
whatever as against the mortgagee or a person claiming 
by virtue of a sale at the instance of the mortgagee. 
It must, however, be borne in mind that the doctrine 
of Us pendens has no application to a case in which the 
proceedings are taken only for the purpose of enforcing 
the personal liability of the mortgagor, or, in other words, 
where the mortgagee seeks to obtain only a money-decree. 
(Bir Ckunder Manikya v. Mohomed Afsarooddin, I. L. R., 
X Cal., 299 the head-note of which is inaccurate, the 
mortgagee not having obtained a mortgage-decree as 
stated by the reporter, but only a decree for money.) 

The provisions of the Civil Procedure Code relating to Provisions 
sales by mortgagees are, however, very defective; and it may, 
therefore, be sometimes necessary for the mortgagee not- Code. 
withstanding that he has obtained a decree for sale to bring 
an action against a purchaser of the mortgaged property, 
who may have bought the equity of redemption after 
the institution of his suit by the mortgagee. (See the 
observations of Oldfield, J., in Jagat Narain v. Jagrup, 
I. L. R., V AIL, 452 ; Pahar Singh v. Jai Chand, N.-W. P., 
S. D. A. Rep. 1864, Vol. I, 543; Mangloo v. Roghoo 
Nath Dass, N.-\V. P., S. D. A. Rep., 1866, 72 ; Gaja'dhar 
Pershad v. Daibee Pershad, Agra H. C. Rep., 1869, 
29). It seems, however, that where the first sale takes 
place at the instance of a puisne incumbrancer who is ^, a 'j?J 
not a party to the decree obtained by a prior mortgagee, 
the latter will be bound to bring a fresh suit against the 
purchaser to enforce his mortgage, as neither the puisne 
incumbrancer nor the purchaser to whom his lien has 
been transferred will be bound by the decree. (Jagat- 
narain v. Jagrup, I. L. R., V All., 452.) 

In the case of Janki Dass v. Budri Nath (I. L. R., II Jnnki 
All., 698), it was held that if there are two simultaneous 
sales in execution of two different mortgage-decrees, the 



1(30 LAW OF MORTGAGE. 

LECTURE auction-purchaser under the decree upon the older lien will 

IV - acquire the property in preference to the other purchaser. 
Ri"M~of But whether a prior mortgagee is or is not bound to 
prior mort- bring a regular suit for the re-sale of the property, there 
gagee to j g no thing to prevent him from doing so. In the case 
safe of pro- of Jagat Narain v. Dhundky (I. L. R., V All., 566), 
perty. w here the property having been sold by a second mort- 
gagee it was argued that the first mortgagee not having 
enforced satisfaction of his decree in accordance with 
the provisions of sections 285, and 295, of the Civil 
Procedure Code by the machinery of the execution 
department, could not bring a fresh action to obtain a 
re-sale of the property, the Court said : " The first para- 
graph of section 295, and clauses (a) and (6) have refe- 
Jagat^ rence only to sales in execution of simple money-decrees, 
p'httndhy' an d to the mode in which sale-proceeds are to be rate- 
ably distributed among simple money-decree-holders. The 
provisions contained in clauses (a) and (6) declare the 
incompetence of a mortgagee or incumbrancer, as such, to 
share in any surplus proceeds, arising when property is 
sold to his mortgage or charge. But the alternative is 
afforded him of consenting to the property being sold 
free of his mortgage and charge, in which case the Court 
may give him the same right against the sale-proceeds 
as he had against the property sold. In the case before us, 
the decree, in execution of which the one-anna share of 
Mouza Sheosara was sold, was not a simple money-decree, 
and, therefore, in our opinion, those portions of section 
295 to which we have adverted are inapplicable. It re- 
mains to be seen whether clause (c) supports the conten- 
tion of the appellants. That no doubt has reference to 
a sale in execution enforcing a charge ; but it will be 
noticed at once that, in distributing the sale-proceeds, the 
discharge of subsequent and not prior incumbrances is 
alone taken into account." 

Mortgagee I will now deal with certain questions which, although 

to* proceed properly belonging to the domain of procedure, also fall 

against within the province of this lecture. We saw that a mort- 

p e ge ' gagee, by obtaining a personal decree against the mortgagor, 

does not forfeit his lien upon the land. He must, however, 

enforce his decree by execution and is not competent to 

maintain a second suit against his mortgagor for the purpose 

of obtaining a decree for sale. (Syed Imam Momtazuddin 

Mohamed v. Raj Coomar Dass, XXIII Suth. W R, 186.) 



RIGHTS OF MORTGAGEE. 161 

But, ns pointed out in Junmajoy Mullick v. Das Moni Das, LECTURE 
a plaintiff who obtains a money-decree against his mortgagor, IV - 
is not precluded from enforcing his lien by means of a second 
suit against the mortgaged property in the hands of a pur- 
chaser to whom the property may have been afterwards 
sold. (Junmajoy Mullick v. Das Moni Dasi, I. L. R, 
VII Cal., 714; IX CaL, 33). "These two Full Bench 
cases, therefore, establish that there is a difference in 
the procedure applicable between the case where the pro- 
perty is still in the hands of the mortgagor, and the case 
where it has passed to a purchaser, the lien being enforci- 
ble in the one case by execution, in the other by suit." 
(Rally Nath Bondopadhya v. Kunja Behary Shaha, per 
Wilson, J. (I. L. R., IX Cal., 655.) But suppose the mort- 
gagee obtains a personal decree and allows it to be barred 
by limitation, can he bring a fresh suit against an alienee 
of the mortgagor who has purchased the property subse- 
quently to the decree ? This very point arose in the case 
of Kali Nath Bondopadhya v. Kunja Behary Shaha (I. 
L. R., IX Cal., 651), and was answered in the negative, 
on the ground that it would be contrary to ordinary prin- 
ciples to hold that the mortgagee acquires a greater right by 
reason of the mortgagor's alienation, or, that the purchaser 
takes subject to a greater burden than the debtor himself. 
If the mortgagee allows his decree against the debtor 
to be barred by limitation, he loses all right to proceed by 
execution against the property in the hands of the debtor, 
and has no better right to proceed by suit against the pro- 
perty in the hands of the purchaser. (I. L. R., IX Cal., 651.) 
I do not, however, think that the learned Judges meant 
to lay down any general rule, or, to deny to the mort- 
gagee the right to abandon proceedings under his money- 
decree, and to proceed upon his lien against a transferee of 
the equity of redemption, provided, of course, his right to 
bring such an action is not barred by the Statute of Limi- 
tations. Although cases in which the transfer is made after 
the right to execute the money-decree is barred may, per- 
haps, be governed by a different rule. (Chunnilal v. Ba- 
naspat, I. L. R., IX AIL, 23.) Another question also relat- 
ing to procedure has given rise to a conflict of opinion, it 
being somewhat doubtful whether a mortgagee who omits 
to prefer the portion of his claim which would charge the 
mortgaged property or who, having preferred it, accepts a 
mere money-decree, is entitled to bring a subsequent suit 

R. B. G. ; M. 11 



162 LAW OF MORTGAGE. 

LECTURE against a transferee for the purpose of enforcing his security 
IV - on the land. Under Act VII E of 1859, such suits were fre- 
quently brought; but a doubt has been raised by the language 
of section 43 of the present Code of Civil Procedure which 
corresponds to section 43 of Act X of 1877, as amended by 
Act XII of 1870. (Goomani v. Ram Podarat Lall, 
I. L. R., II All., 838, where the Court held that a mort- 
gagee who had obtained a personal decree against the 
mortgagor, could not afterwards bring a suit against a per- 
son who had bought the property before he brought his 
first suit for the purpose of enforcing his security. But 
see Bahraichi v. Surju I. L. R., IV All., 257 ; Umrao 
v. Beharo, I. L. R., Ill AIL, 297 ; Junmajoy Mullick 
v. Das Money Dasee, I. L. R, VIII Gal., 700; Raj- 
kishore Shaha v. Bhadoo Norha, I. L. R., VII Cal., 781). 
It is scarc.ely necessary to point out that if a decree for 
sale becomes infructuous, either in whole or in part, by 
reason of want of jurisdiction in the Court directing the 
sale, the mortgagee is not precluded from maintaining a 
second suit for the purpose of availing himself of his security. 
(Gris Chunder Mookerjee v. Ramessuree, XXII Suth. W. R., 
308 ; see also Bungsee Singh v. Soodist Lall, I. L. R., VII 
Cal., 739.) 

Relative Difficulties have not unfrequently arisen owing to badly- 
drawn pleadings ; and suits for possession have been some- 
times brought by persons who were only entitled either to 
foreclose or to redeem. In some cases the Court has refused 
to determine the relative rights of the parties under different 
decrees for sale, on the ground that in a suit for possession 
the question is not which mortgage is prior, but which sale 
is prior ; and as the first sale would undoubtedly carry with 
it the right of possession if it was vested in the mortgagor, 
the Court refused to determine the relative rights of the 
parties on their mortgages in an action of ejectment. (Na- 
nack Chand v. Teluck Dye Koer, I. L. R., V Cal., 265 ; 
Dirgopal Lai v. Bolakee, I. L. R., V Cal., 269; Venkatanor 
Shammal v. Raniah, 1. L. R., II Mad., 108 ; Radhaprosad 
Misser v. MonohurDoss, I.L. R., VI Cal., 317.) But, a more 
liberal rule has been acted upon in other cases, and our Courts 
have, in several instances, allowed suits for possession to 
be converted into suits for foreclosure or redemption. 
(Massimunnessa Bibi v. Nilratan Bose, I. L. R., VIII 
Cal., 79 ; Chnndra Nath Mullick v. Nilakanta Banerjee, 
I. L. R., VIII Cal., 690 reversed on appeal, but on other 



RIGHTS OF MORTGAGOR AND MORTGAGEE. 163 

points Rup Chand Dugdusa v. Davlatrav, I. L. R., VI LECTUBK 
Bom., 495; Shivram v. Genii, I. L. R., VI Bom., 515; San- 
kana v. Virupakshapa, I. L. R., VII Bom , 146. Didlabh- 
duss v. Lakshmandas I. L. R., X Bom., 88 ; Venkata v. 
Kannam, I. L. R., V Mad., 184.) 

In England the practice of a Court of Equity is not Practice of 
to make a decree for redemption on a bill which does cJurt!" 7 
not pray for redemption. It is not sufficient that, taking 
the bill and answer together the suit appears to be in 
substance a suit for redemption. If, for instance, the 
plaintiff by his bill impeaches the validity of the mort- 
gage-security but fails to establish his case, no decree 
can be made in the suit except one of dismissal, without 
prejudice, however, to the plaintiffs right to bring a 
suit with the formal object of redeeming the mortgage. 
(BrougJiten v. Binks, VI Ves. 573 ; Martinez v. Cooper II, 
Russ 108 ; Gordon v. Horsfall, 5 Moon., P. C. 393 ; Inman 
v. Waring, 3 DeG & Sm., 729 ; Johnson v. Fesenmere, 
XXV Beav., 88 ; and Greaver Mining Co. v. Willy ms, 35 
Beav., 353.) It is, however, not quite clear whether a Court 
of Appeal will set aside a decree for redemption simply on 
the ground that the plaintiff does not ask for redemption 
in his bill (But see the dictum of Lord Eldon in Martinez 
v. Cooper, II Russ., 198). 

Circumstances may, however, occur which would justify E x c e p- 
a departure from the somewhat strict and technical rule tioaicases. 
enforced by the English Courts of Equity. It will be 
found that the rule is confined only to those cases in 
which, while, on the one hand, the plaintiff impeaches the 
mortgage-security, the defendant, on the other, admits his 
character of mortgagee, and claims no higher right. It 
will not apply to cases in which the mortgagee claims an 
absolute title. In the National Bank of Australasia v. 
United Hand-in-hand and Band-of-hope Co. ( IV L. R., 
P. C., 391), where the plaintiff sought to recover possession 
of the mortgaged premises as if they were unincumbered 
and the defendant resisted the action, not as mortgagee in 
possession, but as absolute owner, and the issues disclosed by 
the pleadings, which were somewhat loose and informal, 
were not merely mortgage or no mortgage, but also whether 
the defendant had ceased to be mortgagee and become the 
absolute owner, the suit was regarded in the nature of 
an equitable ejectment in which each party claimed an 
absolute interest in the property for the profits of which 



164) LAW OF MORTGAGE. 

LECTURE the bill sought an account. The Supreme Court of 
IV< Victoria took an intermediate view of the rights of the 
parties, and, being of opinion that the original relation, 
of mortgagor and mortgagee, which existed between the 
parties, had not been determined, directed an account of 
what remained due as in an ordinary redemption-suit. 
It was contended in appeal that the Court was not 
justified in making a decree for redemption, and the rule 
followed by Courts of Equity in England was relied upon 
in support of the objection. The contention was, however, 
overruled by their Lordships of the Privy Council. "It 
plainly appears," say their Lordships in giving judgment, 
" that the issues raised between the Company and the 
Bank were not merely mortgage or no mortgage, but, 
further, by means of its acts subsequent to the impeached 
mortgage, the Bank had ceased to be mortgagees and had 
become absolute owners." The Court was bound to try 
all those issues. The dismissal of the suit might have 
been taken to affirm the title set up by the Bank generally, 
or would, at least, have left its claim to more than a 
mere mortgage-title, subject to redemption, open to future 
litigation. Again, if the Company, as the Court observed, 
failed to establish its right to have the mortgages set 
aside, but succeeded on all the other issues, the result 
was only to modify the right prayed for by the bill, and 
it was obviously necessary to direct the accounts auxi- 
liary to that modification in order to ascertain whether, 
as alleged by the bill, the Bank's advances on the footing 
of the mortgagees had been more than satisfied by their 
receipts, or whether there was still any balance due to 
them in respect of those advances. Their Lordships 
are, therefore, of opinion that the rule invoked does not 
apply to such a case as the present, and conceive that 
they are in some measure supported in that opinion by 
the cases of Montgomery v. Calland (XIV, Sim., 79), and 
the Incorporated Society v. Richards, (I. D. and War. 158)." 
What happened in the above case, happens almost in every 
case in this country, each party claiming to be the absolute 
owner, and in such cases our Courts ought to follow the 
rule laid down by their Lordships. 

ucfn^o'f ^- return - Questions of some nicety occasionally arise 

mortgaged where the mortgaged premises have been converted in- 

conerted to monev -. Where money, for instance, is paid in as 

compensation for purchase of land under the compulsory 



CONVERSION. 165 

powers given by the Land Acquisition Act, the purchaser LECTURE 
takes the property discharged of all incumbrances, and the 
rights of the mortgagee are transferred to the compensa- 
tion-money. A similar result follows, in this country, a intomoney. 
statutory sale for land-revenue and also, in certain cases, 
where the mortgaged property is a leasehold estate, a sale 
by the landlord for arrears of rent. (Kali Kanto Chowdhry 
v. Romoni Kanto Bkattacharji, III Suth, W. R, 227.) It 
has been held that in such cases the purchase-money or the 
surplus-proceeds should be regarded as money or personal 
estate, for, although impressed with the charge to which the 
land was subject, it cannot be said that the money is real 
estate : it is only to be considered as real estate. And, 
although it may properly be regarded in that light for 
the purpose of the question as to who has the best right 
to it, still it is, in fact, money and not immoveable pro- 
perty (n). 

A somewhat difficult question arose in the case of Ram Ram Kant 
Kant Chowdhry v. Brindabun Chunder Das (XVI Suth. 
W. R., 246). In that case the mortgagee lent his money upon 
the security of certain landed property. The debt was 
payable by instalments, and, on one of them becoming due, 
the mortgagee brought an action for it and sold a portion 
of the property under mortgage. The judgment-debt 
having been discharged, there remained a surplus in the 
hands of the Court. Some other judgment-creditors having 
applied for the payment to them of the surplus proceeds, 
the application was resisted by the mortgagee on the 
ground that, by virtue of his mortgage, he possessed a lieu 

() It is this fact which determines the jurisdiction of the Court 
under section 16 of the Civil Procedure Code. -(Venltata v. Krishnasamy, 
I. L. R., VI Mad., 344.) It seems to be, however, very doubtful whether 
the money will be regarded as personal property for the purposes of the 
Limitation Act, although it was assumed by the Madras High Court that 
the conversion of the land into money had the effect of shortening the 
ordinary period of limitation. (See In re Stewart's Trusts, XXII 
L. J., N. S., 369.) I may mention that the Madras case also shows 
that if a portion of the mortgaged premises has been coverted 
into money, a mortgagee will not be precluded from following the 
purchase-money by section 43 of the Civil Procedure Code, if at the time 
of his bringing his action on the mortgage, he was ignorant of the con- 
version of the land into money. (Cf. Krlsto Dass Kundoo v. Ram Kanto 
Roy Chon-dhry, I. L. R., VI Cal., 142.) The last case also lays down as a 
settled principle that the money, which is substituted for the mortgaged 
land, becomes subject- to the lien to which the land which it represents 
was subject. (Cf. Heera Lall Chon-dhry v. Janoki Nath Mookerjee, XVI 
Suth. W. R., 222.) This rule, however, does not apply where the con- 
version is occasioned by some default on the part of the mortgagee. 



166 LAW OF MORTGAGE. 

LECTURE on the balance of the purchase-money for the unpaid in- 
IV- stalments. In the meantime, the plaintiff obtained a decree 
for a further instalment, and the question which the Court 
was called upon to determine was whether the mortgagee 
had or had not a preferential claim on the surplus proceeds. 
In giving judgment for the mortgagee, the Court observed : 
" The money was lent upon security of certain immoveable 
property and waa to be repaid by instalments. It might 
well have been that the property pledged should be of 
such a nature as to be incapable of division ; and that the 
plaintiff, on one of such instalments becoming due, would 
have to sell the entire property. Could it be said that he 
would, by bringing the entire mortgaged property to sale 
for the recovery of one instalment, lose all lien over the 
surplus proceeds ? Assuredly, we think, not. 

It seems then to make no difference that in this case 
the property was capable of being divided. The question 
as to what portion of the property should be sold for the 
instalment immediately due, would be rather a question 
to be considered as between the mortgagor and mortgagee 
by the Court executing the decree, and is not a question 
which arises in the present suit." (Ram, Kant Chowdhry 
v. Brindabun Chunder Dnss, XVI Suth. W. R,, 246). It 
may be mentioned in addition to the above reasons that the 
mortgagee could not well have brought a suit in the first 
instance, either for recovery of the money which had not 
then fallen due, or, for a declaration that the property was 
subject to a lien for the whole of the money secured by 
the bond, and, to have denied him a preferential claim on 
the surplus proceeds would have been to cut down his 
security contrary to the intention of the parties. (Cf. 
Umra v. Behari, I. L. R., Ill AIL, 297 ; cf. Greenough 
v. Littler, 14 Ch. D., 93 ; Nives v. Nives, id., 649. 

In connection with the law of procedure, I may mention 

Joint mort- ,, , ,, .... , ' ,- J 

gage by two that, where there is a joint mortgage by two or more 

m C r" r e mor ko a g ors > the mortgagee ought to bring his action 

gagors." against all the mortgagors jointly, as he might otherwise 

be in danger of losing the benefit of his security as 

against those who have not been joined in the suit. (Rai 

Lutchmeput Sing v. Land Mortgage Bank of India, I. L. R., 

XIV Cal., 469, note ; Nuthoo Loll Chowdhry v. Shoivki 

Lai, XVIII Suth. W. R., 458; X Ben. L. Rep., 200; 

Ponnappa Pillai v. Pappurayyangar, I. L. R., IV Mad., 

1 ; Gurusami Chetti v. Samurti Chinna Manner Chetti 



FORECLOSURE. 167 

I. L. R., V Mad., 37 ; Ckockkalinga Mudali v. Sulbanaya LECTUBE 
Mudali, I. L. R., VMad., 133; Hemendro Coomar Mullidc 
v. Rajendro Lai Moonshi, I. L. R., Ill Cal., 353; 
Kendall v. Hamilton, IV L. R., App. Ca., 504.) 

It seems to me, however, that the rule of the English law, English 
upon which the foregoing judgments were based, is a highly ^" ' 
artificial one, and cannot safely be extended to cases arising 
iu the mofussil Courts. The Madras High Court has in 
its later decisions refased to follow the rule, and I trust 
that when the question again arises in the Calcutta High 
Court, the point will be reconsidered. (See the observa- 
tions of Markby, J., and of Muttaswamy Iyer, J., on the 
point. Cf. Ramakrishna v. Namasivaya, I. L. R., VII 
Mad., 295 ; Umamahasivara, v. Singaperumal, I. L. R., 
V1TI Mad., 376; Sita Nath Koer v. Land Mortgage Bank 
of India, I. L. R., IX Cal., 888; Nobin Chundra Roy v. 
Magon Tara Dassya, I. L. R., X Cal., 924.) It is worthy 
of notice that even in England the learned Judges who 
took part in the decision in Kendall v. Hamilton in the 
House of Lords were not unanimous, and it is, to say the 
least, extremely doubtful whether the decision would have 
been the same if the principle had not been sanctioned by 
the authority of a series of judgments extending over 
half a century. 

The question as to the right of one or more of several Ri s h * i of 
persons to whom a mortgage has been made, to bring a suit several 
to enforce the security, without joining their fellow-mort- mortgagees 
gagees is also, attended with some difficulty. The practice to 
of our Courts is to allow such an action to be maintained if 
the other mortgagees are unwilling to join in the suit even 
though no case of fraud or collusion is made out ; but the 
co-mortgagees ought in every such case to be made defen- 
dants, and the suit must be one to enforce the security 
as a whole ; one of several co-mortgagees not being com- 
petent to maintain an action in respect only of his own 
interest in the joint mortgage. But the position of the 
plaintiff in such a suit has not been clearly defined. It 
has been asked, for instance : Whether the plaintiff as domi- 
nus lites may not forego a portion of the claim ? Whether 
the institution of one suit would prevent any of the other 
mortgagees from bringing their actions ? What would be 
the effect of the plaintiff dropping proceedings in the action ? 
It is, perhaps, not easy to answer these questions satisfac- 
torily, but to deny a co-mortgagee the right to maintain an 



168 LAW OF MORTGAGE. 

LECTUBE action on the security in any case without joining the 
IV - other mortgagees, would open a wide dpor to fraud and 

collusion. 

Suit for The inconveniences of allowing one of several joint mort- 
foreciosure g a g ees to bring an action of foreclosure were forcibly pointed 
out by Mr. Justice Fry in Luke v. South Kensington Hotel 
Company (VII Ch. D., 789). In delivering judgment the 
learned Judge said : " I must consider, in the first pjace, 
whether the action can be maintained as a foreclosure- 
action, that is to say, whether, when a mortgage has been 
made to three persons jointly, one of those three can for- 
close the mortgage, making the other two defendants to the 
action. It is admitted that no precedent can be produced 
for such a proceeding, and it appears to me that the incon- 
veniences of it are manifold and manifest. In the first 
place, it would follow that you might have as many actions 
pending as there were mortgagees. Take the case, with 
which we are very familiar, of a mortgage for a large sum 
of money made to half a dozen persons as trustees for an 
Insurance Company, the name of the Company not appear- 
ing on the face of the deed. You might have six fore- 
closure actions, one brought by each of the mortgagees, 
against the mortgagor, naming the other five as defendants 
on the record. Then, there are further questions which 
would arise at the hearing. In a foreclosure-action you 
may have foreclosure or sale. How is the question which 
it is to be, to be determined ? Would the plaintiff be domi- 
nus lites for this purpose, so that he could dictate to the 
other mortgagees what relief was to be had, or must there be 
a struggle between the co-mortgagees as to what the nature 
of the relief to be had, should be ? It appears to me that 
the inconveniences of such a course are very manifest. 
But, then, it is said that where there are several co-mort- 
gagees one of them might have a bad reason for not desir- 
ing to foreclose, or, might have no reason at all. He may 
be content to leave things as they are, and decline to join 
the foreclosure-action. Such questions undoubtedl}' have 
often arisen, and, in all probablity, will often arise again, 
and they may have to be determined in some way. But, 
I am of opinion that they must be determined in a sepa- 
rate and independent proceeding, and that the mortgagor- 
is not to be harassed by conflicts and controversies be- 
tween his mortgagees ; but that the question whether an 
action for foreclosure shall or shall not be brought, is not 



JOINT MORTOAaES. 1C9 

to be determined in the action for foreclosure itself. To LECTURE 
mix up the question, whether an action ought to be brought, 
with that action itself, seems to me inconvenient to the 
last degree ; and upon that ground I come to the conclusion 
that the plaintiff cannot maintain this action as a foreclo- 
sure-action. " 

A different rule, however, was laid down by the Court of 
Appeal and it was held that one of several mortga- 
gees* can maintain an action to foreclose the mortgage, 
making the others co-defendants if they are unwilling to 
be joined as co-plaintiffs, or if they have done some act pre- 
cluding them from being plaintiffs. (Luke v. South Kensing- 
ton Hotel Company, XI Ch. D., 121). The learned Judges, 
by whom the appeal was heard, were of opinion, that, on gene- 
ral principles, as well as according to the practice in Equity, 
such a suit was maintainable, as the plaintiff could not 
otherwise by any possibility obtain the relief to which he was 
entitled. With regard to the argument that several actions 
of foreclosure might be brought upon the same security, 
the learned Judges observed that there would be no difficulty 
in dealing with the case if it occurred, as the Court would 
stop all the actions with the exception of the first. It 
must, however, be remembered that in the case to which I 
have just referred, the co-mortgagees did not refuse to fore- 
close, although they were not willing to be joined as plain- 
tiffs ; and, the question as to whether one of several mort- 
gagees can foreclose a mortgage without the consent or 
against the wish of the others, is, therefore, left undetermin- 
ed, the Court observing that they would deal with that case 
when it actually arose. It is, however, not at all difficult 
to foresee how the question will be answered by the Court. 

Whatever doubt there may be as to the right of one of Right of a 
several mortgagees to foreclose the mortgage when the others ^ a int>m t rt ' 
are unwilling to do so, there can be no doubt of his com- su e 
petency to enforce the security, where, from the nature 
of things, it is absolutely impossible for all the mortgagees 
to join as plaintiffs, as in the case mentioned by Lord 
Justice James, in which there were three mortgagees hold- 
ing a joint-mortgage, two of whom became mortgagees, 
on their separate account, of the second and the third 
mortgagees of the equity of redemption. In this case, you 
will observe, it was absolutely impossible for the three to 
join as plaintiffs, because they were both mortgagees and 
mortgagors. The difficulty was avoided by one mortgagee 



]70 LAW OF MORTGAGE. 

LECTURE filing his bill, making the others interested in the equity 
IV - of redemption defendants. 

The same practice is followed in this country in cases 
in which, and they are not of unfrequent occurrence, 
the equity of redemption becomes vested, either in whole 
or in part, in one of several mortgagees. I shall, however, 
discuss the question more fully in a future lecture. (As to 
.where a suit by one mortgagee alone may lie, see Ram 
Ruttun v. Umed Hossain, N.-W. P., 1853, 91 ; see also the 
dictum of Wilson, J. in Callynatk v. Koonjo Beliary, 
I. L. R., IX Cal., 651.) 

Mortgagee It Was thought at one time that, even in the absence of 
^ceed a direction in the decree to that effect, a creditor, whose 
against any debt was secured by a mortgage, was bound to proceed, in 
property. ^ Q g rs (. i ns fc a nce, against the property mortgaged to him, 
and that he could only proceed against other properties for 
the deficiency, should there be any. (Brolimoye Debea v. 
.Baikant Chunder Gangulee, V Suth. W. R., Mis., 52). 
It is, however, now settled that in the absence of an ex- 
press direction to that effect in the decree, a mortgagee is 
under no such, obligation, and that he is at liberty to 
proceed against any property belonging to his debtor in 
the same manner as an unsecured creditor. (Luclimi Dai 
Soori v. Asman Singh, I. L. R., II Gal, 213 ; Purmessari 
Dassee v. Nobin Chunder Tarun, XXV Suth. W. R., 305 ; 
Fukir Bux v. Chuttordharee Chowdhry, XII Ben. L. Rep., 
513, note ; XIV Suth. W. R., 209 ; Kalee Pershad Singh 
Nundee v. Raye Kishoree Dossee, XIX Suth. W. R., 381 ; 
Radha Kant Roy v. Mirza Sudaput Mahomed Khan, XXI 
Suth. W. R., SG, and Hart v. Tara Prosunna Mukerjee, 
I. L. R., XI Cal., 718 Rajkishore Shaha v. Bhadoo Noshoo, 
I. L. R., VII Cal., 78.) But this privilege cannot, for ob- 
vious reasons, be claimed by a mortgagee who is restricted 
by his decree only to proceedings against the land on 
which the debt is secured. (Solano v. Moran, IV Cal. 
L. Rep., 11 ; Sudan v Ramchandra, I. L. R., XI 
Bom., 537.) This may happen either because there was 
no covenant to p'y, or because it could not be enforced 
by reason of the operation of the Statute of Limitations, 
or because the suit was not brought to enforce the cove- 
nant. 

Limitation It must not, however, be supposed that a mortgagee 
* 8 a ^ wa y s at liberty to proceed either against the" pro- 
, or against the person of the mortgagor. There are 



RIGHTS OF MORTGAGEE. 171 

undoubtedly cases in which such a proceeding might operate LECTURE 
to the serious injury of the mortgagor, and the Court exe- 
cuting the decree has undoubtedly a discretion to take bound to 
such precaution as would prevent any injury of that kind, proceed 
(Luchmi Dye Soori v. Asman Sing and others, I. L. R. 
II Cal., 213.) Thus, in one case the Court compelled the 
decreeholder to proceed against the mortgaged property 
where such property had been sold in execution at an under- 
value by reason of the mortgage, and purchased by the 
mortgagee's brother, the learned Judges observing that they 
were not precluded from applying equitable principles to 
questions arising in proceedings relating to the execution 
of decrees. (Ali Muhammad v. Turab Ali, I. L. R., 
IV All., 497.) So, again, in the case of Gulab Sing v. 
Peminan (I. L. R., V AIL, 342), the Court held that to 
allow a purchaser of the equity of redemption to take an 
assignment of a mortgage-decree, and then to levy execution 
upon property outside the mortgage, would be to enable 
the purchaser to pay himself twice over to the injury of 
the mortgagor. 

The mischiefs which would arise from permitting the 
mortgagee in all cases to proceed at his option, either against 
the property pledged to him or against other properties be- 
longing to the mortgagor, are very clearly pointed out in 
the case of Kali Dass Ohose v. Lalmohun Ghose (XVI Suth. 
W. R, 306). In this case the mortgagee attempted to share 
in the surplus proceeds after having publicly notified his 
lien at the time of the execution-sale. In disallowing the 
claim the Court observed: "It appears to us that the 
decree-holder should be made to abide by his election. He 
interfered at the auction-sale and notified publicly that he 
retained his lien over the property. The consequence was 
that the estate, instead of being sold free of incumbrance 
(and it is not contended that there were any other liens upon 
it) was sold subject to a debt of nearly Rs. 15,000. And it 
can hardly be supposed that such a burthen did not consi- 
derably reduce the price bid. There is nothing on the 
record to show what effect Kalidas's notification had on the 
result of the sale ; but it could hardly have been other 
than disadvantageous. And then, besides, if Kalidas be 
now allowed to give up his mortgage-lien and reimburse 
himself from the sale proceeds, what is the position of 
the auction-purchaser ? He bought the rights and inter- 
ests of the judgment-debtor the equity of redemption 



172 LAW OF MORTGAGE. 

LEOTUBE but if there be no mortgage on the estate, as there would 
IV - not be if the creditior gave up his lien, there is no 
equity of redemption left; and, again, if there be no mort- 
gage, the property is unincuinbered. So, it would seem that 
the auction- purchaser has either bought nothing, or else, 
instead of the equity of redemption, has bought the entire 
proprietory right in the estate, a right that was never 
put up to sale at all ; and so with the debtor. If the 
mortgage falls, which would seem to be the case if the 
creditor were allowed to satisfy his decree from the sale- 
proceeds, how is he to get back his land ? Must he bring 
a suit to compel the creditor-mortgagee to re-assign the 
mortgaged interest ? It seems to us, that if the decree- 
holder gets what he asks, the debtor will, after having 
paid the entire amount of the bond, be in a very consi- 
derable difficulty, and tlie auction-purchaser in a most 
anomalous and improper position. 

Cnsesonthe The case of Mirza Fatteh Ali v. Gregory (VI Suth. W. 

point. R ^ Mis., 13) is very much in point and supports the view 
we have taken above." (Of. Byjonath v. Doochun, XXIV 
Suth. W. R., 83; Bank of Bengal v. Nundolal, XII Ben. 
L. Rep., 309.) 

Indeed, it does not require much argument to show 
that it would be extremely unjust to allow the mortgagee 
of a property, which is sold subject to his mortgage, to 
obtain the surplus-proceeds in satisfaction of his de- 
cree, as the practical effect of allowing the mortgagee to 
satisfy his decree out of the surplus-proceeds would enable 
a purchaser, who purchases and pays for only the mort- 
gagor's interest in the property, to hold it released from the 
mortgagee's lien. (Mirza Fatteh Ali v. Gregory, VI Suth. 
W. R., Mis., 13.) 

Madras In Kuppaiya Chetti v. Thasamathasi Chetti (IV Mad., 

Case. H. C. Rep., 49,) the Court refused to allow the mortgagee to 
obtain the discharge of the mortgage-debt due to him, out of 
the proceeds realised on the sale of the mortgaged property, 
in preference to an unsecured creditor at whose instance the 
sale took place, although it appears that the property had 
been first attached by the mortgagee, which circumstance 
would, ordinarily, as the law then stood, have given a prefer- 
ential claim to the creditor. I may mention that the sale in 
this case was not made with express notice, that the right 
title and interest of the execution-debtor was only that 
of a mortgagor; but the Court, notwithstanding, refused 



RIGHTS OF yORTMGEE. 173 

to allow tho claim of the mortgagee. The Court observed: LECTUBE 
"All that has been sold in execution of the second IV - 
defendant's decree, because all that could legally be 
sold, is the right, title, and interest of the first defendant, 
the execution-debtor, and his proprietory right at the 
time was subject to the plaintiffs mortgage. If then, 
the mortgage was a valid charge on the property before 
the attachment, it is unaffected by the sale, and the pur- 
chase-money cannot be treated as more than the value of 
the mortgagor's right of redemption. We are, therefore, 
clearly of opinion, that the plaintiff's claim is of no avail 
against the right of the second defendant to be paid the 
full amount of his judgment-debt, and on this ground the 
decree of the lower Appellate Court in favour of the second 
defendant must be upheld." Indeed, whenever a mortgagee 
sedulously avoids proceeding against the mortgaged property 
and endeavours to satisfy his decree out of other proper- 
ties, it may be safely presumed that he is seeking to gain 
an undue advantage over his mortgagor. 

The foregoing considerations do not, however, appear to Section 271 
have been presented to the Court in some reported cases of 
where the contention on behalf of the mortgagor appears to 
have been rested solely on section 271 of Act VIII of 1859, 
or rather, on the proviso contained in that section corres- 
ponding to the enactment contained in section 295 of the 
present Code of Civil Procedure, but which, as we shall pre- 
sently see, has no real bearing on cases in which the contest 
is, not between a mortgagee and an unsecured execution- 
creditor, but between the mortgagee and his debtor. In 
Fakeer Buksh v. Chutter DJtari Chowdhry (XIV Suth. 
W. R, 209) the dispute being one between the mortgagor 
and the mortgagee as regards the right of the latter to 
discharge his mortgage-debt out of certain surplus proceeds 
which stood to the credit of the mortgagor, the learned 
Judges were of opinion that it was competent to the mort- 
gagee to waive his right as such, and to come in as an 
ordinary execution-creditor. Indeed, the Court went much 
further, observing : " It was competent for the present 
appellant to waive his right as a mortgagee, and to bring 
his suit for the recovery of the money due to him upon 
the bond. He did bring that suit, and got a decree for 
the money ? It is true that the decree says that the execu- 
tion shall be had against the property which was pledged, 
and afterwards against the person. Nevertheless, it is a 



174 LAW OF MORTGAGE. 

LECTURE decree for the money which was due upon the bond ; and 
IV - we think it was competent for him to say : ' I am content 
to rest upon the decree which I have obtained, and waive 
the right which I have as mortgagee and, resting upon 
that decree, I now seek to have a share in the surplus 
proceeds of sale under section 271.' We think he is enti- 
tled to do that." 

Mortgagee The proposition that a mortgagee by taking a mortgage 
his^i^t's. 6 does not place himself in a worse position than an unse- 
cured creditor, and may, therefore, waive his rights as 
mortgagee, however plausible, would, I think it must be 
allowed, unless carefully fenced in by considerable reserva- 
tions, open a wide door to fraud, of which mortgagees 
would not, perhaps, be slow to avail themselves and of 
which a fair illustration is to be found in the case of 
Pormesharry Dassi v. Nobinckunder Taron (XXIV 
Suth. W. R., 305). It appears from the report of the 
case that an unsecured creditor and a mortgagee having 
both attached the property which was pledged to the 
latter, it was put up for sale at the instance of the unse- 
cured creditor, whose debt was paid out of the proceeds 
and the balance remained in Court at the credit of the judg- 
ment-debtor. The mortgagee then put in an application 
stating that he did not wish the property to be sold in ac- 
cordance with his previous application and asked that his 
debt might be satisfied out of the money in the hands 
of the court. It is impossible to avoid a strong suspicion 
that this application was due to some secret understanding 
with the execution-purchaser, and was made to benefit 
him at the expense of the mortgagor ; but the Court not with- 
standing allowed the application on the authority of Fakeer 
Bulcsh v. Chutter Dhari Chowdhry (XIV Suth. W. R., 209.) 
As I have already pointed out, the argument in both the 
cases was based solely on section 271 of the Civil Procedure 
Code and the Court was not called upon to consider the 
equities which arose in favour of the mortgagor. 

The observation in Fakir Bux's Case (XIV Suth. 
W. R., 209 ) that the mortgagee was not bound to pro- 
ceed in the first instance against the property comprised in 
his mortgage, although the decree should say that execu- 
tion should be had against the mortgaged property first, and 
afterwards against the person, would also seem to be open 
to criticism and cannot safely be regarded as a precedent. 
There seems to be ample authority for the position that 



RIGHTS OF MORTGAGEE. 175 

where a decree is so worded as to compel the mortgagee LECTUBE 
to proceed, in the first instance, against the property pledged 
to him, he is bound to obey the direction contained in the 
decree, and is not at liberty to evade it by waiving his 
rights as mortgagee and coming in as an ordinary execu- 
tion-creditor. (Luchmi Dye Koori v. AsmanSing, I. L. 
R., II Gal, 213 ; Kvisto Klshore Dutt v. Hup Lall Dass, 
I. L. R, VIII Gal., 687.) 

Before dismissing this subject, I will only mention that 
every Court has a right to prevent any abuse of its process, 
and that it has a discretion in executing a decree to take 
such precaution as might be necessary against any wanton 
injury to the debtor. It is true that there is no express 
provision on the subject in the Code of Civil Procedure ; 
but the action of the Court in restraining the mortgagee 
when a proper case is made out from proceeding in an 
oppressive manner cannot, I presume, be fairly regarded 
as in any way trenching upon the province of the Legis- 
lature. 

Again, the right of a mortgagee to enforcehis decree against Right of 
any part of the property pledgedto him for the wholeof the mort g a ffee 

IT 11 j i -ill -j to proceed 

mortgage-debt, may also be controlled by equitable considera- against any 
tions arising out of transactions subsequent to the decree. Pi 11 " 1 f the 
Thus, for instance, if two villages are mortgaged as security p 
for a debt, and the mortgagee acquires the right of redemp- 
tion in one of them, he will not be permitted to levy exe- 
cution for the whole of the mortgage-debt on the other 
village. I shall explain in a future lecture the principle 
on which, in the event of the mortgagee purchasing a por- 
tion of the property comprised in his mortgage, the mort- 
gage-debt is distributed over the different parcels. What 
I now wish to point out is, that the court of execution 
is competent to determine the proportions in which the 
mortgage debt should be apportioned, and that, ordinarily, 
it is not necessary to bring a regular suit for the purpose 
of enforcing any equity which may arise between the 
parties. (Luchmi Narain Puri v. Bikram Singh, IV Cal. Luchm, 
L. Rep., 294.) In this case it appears that one of two Bikl ' am - 
villages, upon a mortgage of which the decree-holder had 
obtained a decree with an order for sale, having been attach- 
ed in execution of another decree was sold, subject to the 
first decree and purchased by the decree-holder himself 
who then sought to execute his decree by the sale of the 
first village claiming to charge the entire debt upon it. It 



mi v. 



176 LAW OF MORTGAGE. 

LECTURE was contended on the other hand by the mortgagor that the 
IV - village which had been bought by the mortgagee should be 
first resold, and that the other village should be sold only in 
the event of there being a balance unrealised by the sale 
of the first village. The Court was of opinion that both 
parties were equally wrong in their contentions. The mort- 
gagee was clearly bound to give credit for the share of the 
debt assignable to the village, which had been bought by 
him, while the purchaser on his part was not entitled to 
demand a resale. The Court accordingly directed that an 
account should be taken of the relative values of the mort- 
gaged properties and the debt distributed in accordance 
with such valuation ; the mortgagee being at liberty to 
proceed to execute his decree for the sum chargeable upon 
the second village by the sale of that village. 

Nitfer v. Tn another case, however, reported in the same volume of 
Baikanto. fa Q Calcutta Law Reports, a different course was adopted. 
It appears that a decree had been obtained upon a mortgage 
against two judgment-debtors who were the joint owners 
of a certain village. Before execution had been taken out 
by the mortgagee, the share of one of the judgment-debtors 
in the village was sold subject, however, to the mortgage. 
The purchaser, in order to protect the share bought by him, 
took an assignment of the mortgage-decree and proceeded 
to execute it against the remaining share. He was met 
by an objection on the part of the judgment-debtor that 
the transaction which had taken place between him and 
the mortgagee, amounted to a satisfaction of the decree, 
and, by the further objection that the effect of the transac- 
tion was to place him in the position of a judgment-debtor 
who had purchased the decree and that the decree was, 
therefore, incapable of execution. But the Court thought, 
that the result of the purchase was not to make the 
assignee a judgment-debtor oraquasi-judgment-debtor, but 
only to put him in the place of the original mortgagor. 
All that he had done was to purchase the decree in order to 
protect the property which he had bought from being sold 
under the mortgage-decree. But as transferee of the 
decree, lie was entitled to execute the decree against the 
defendant personally, and also, in the event of his making 
default, in pa} 7 ing the amount to go against the remainder 
of the property mentioned in the decree. " It may be," the 
court observed, " if the decretal money has to be realised 
by the sale of the last mentioned property, an equity may 



MONEY-DECREE. 177 

arise as between the appellant and defendants to have the LKCTUKE 
decretal money distributed over the whole of the property ^-_ 
mentioned in the decree, and to have the share of the 
mehal bought by the appellant at the Government sale, 
contribute its proportionate part of the decretal money. 
But if such an equity exists, I think it must be asserted in 
an independent suit. At all events, the existence of such 
an equity, supposing it to exist, is no bar to appellant 
now proceeding against (sic) to execute the decree." (Nafer 
Chunder Mundcd v. Baikanto Nath Roy, IV Cal. L. Rep., 
156.) 

The case, therefore which I may mention, in passing, 
was heard ex partec&n scarcely be regarded as distinct 
authority for the proposition that an assignee of a mortgage- 
decree having an interest in a portion of the mortgaged 
premises, is entitled to proceed for the whole amount of the 
debt against the remainder. But it is undoubtedly authority 
for the position that such assignment has not the effect of 
satisfying the decree, and this is so, not because, as is some- 
times thought, a decree upon a mortgage is not a decree for 
money, but because the assignee was never personally lia- 
ble for the debt, and this seems to be the real ground of 
the decisions on the point. (Lalla Bhagun v. Holloway, 
I. L. R., XL Cal., 393 ; Yalcoob Ali v. Uamdulal, XIII 
Cal. L. Rep. 272). 

In this connection I may mention that a decree upon a Decree 
simple mortgage is regarded for many purposes as a u p on a 
decree for money ; and it is none the less a decree for mortgage 
mone^y, even though other relief is given by the decree, a decree 
(Hart v. Tara Prosunno Mookerjee, 1. L. R., XI Cal., 7l8, for money ' 
and the cases cited therein.) But some of the provisions 
of the Civil Procedure Code regulating the mode of execu- 
tion of decrees for money, are obviously inapplicable to a 
decree upon a mortgage which directs the sale of the pled- 
ged property in pursuance of a contract specifically affect- 
ing such property. ( Womda Khanuin v. Ramroop Koer, 
I. L. R., Ill Cal., 335 ; Bhagwan Prasad v. Shea Sahay, 
I. L. R., II All., 856 ; Bhagvan v. Hati Bhai, I. L.R., IV 
Bom., 25 ; Binda Prasad v. Madho Prasad, I. L. R., II All., 
129; Hardeo v. Hukam, I. L. R., II All., 320; Bachu v. 
Madad Ali, I. L. R., II All., 649. Cf. Shdnkarapa v. 
Danapa, I. L. R., V Bom., 604; where the words "attach- 
ment or sale by any process of any civil court in Bom- 
bay " (Act V. of 1862) were held to prevent attachment 

R. B. G., M. 12 



178 LAW OF MORTGAGE. 

LECTUBE and sale under simple money-decrees, and not a sale in 

IV - satisfaction of a mortgage-decree (o). 
ft- T77 I may here mention, that in one case the Court restrained 

i i (* /* i 

Court to the mortgagee by its decree from entorcing his mortgage 
nortcMgefi against any property, comprised in the mortgage for the 
in case of whole of the mortgage-debt. There was in that case a very 
collusion. s t rou g suspicion of collusion between the mortgagor and 
the mortgagee for the purpose of throwing the whole bur- 
den of the mortgage-debt on a portion of the pledged 
property which had passed under an execution-sale against 
the mortgagor into the hands of a third person. The Court 
by its decree directed an apportionment of the mortgage- 
debt between the different properties and enjoined the 
mortgagee from taking out execution against the property, 
which had passed out of the mortgagor's possession, except 
for the amount which should be apportioned to such pro- 
perty without satisfying the court that he had made every 
possible effort to execute the remainder of his decree 
against the other properties (Ramdhon Dhur v. Mohesh 
Ghunder Chcnvdhry, I. L. R., IX Cal., 46). The case 
is an apt illustration of the anxiety of our courts to pre- 
vent fraudulent or oppressive conduct on the part of a 
mortgagee ; but it can scarcely be regarded as a pre- 
cedent. 

Before dismissing the question of fraud, I must mention 
that a mortgagee who causes the property pledged to him 
to be sold in execution, cannot afterwards set up his mort- 
gage against that property unless he shows that the pur- 
chaser bought with notice of his claim ; and it seems that 
the mere fact that, at some time or other, the mortgagee 
of thecfvH i n f rme d the Court by which the property was sold of his 
Procedure mortgage, is not evidence that the purchaser bought with 
Code, notice. (Dullab Sircar v. Krishna Koomar Bukshi, 3 Ben. 
L. Rep., 407 ; XII Suth. W. R., 303 ; Doole Chand v. 
Mussammat Omda Begum, XXIV Suth. W. R., 263 ; Tuka 
Ram Bia Athmaram v. Ram Chunder, I. L. R., I Bom., 
314 ; Nursiny Narain v. Roghoobur, I. L. R., X Cal., 609.) 
Section 287 of the present Civil Procedure Code expressly 
requires that every incumbrance to which the property is 

(0) No attachment is necessary in the case of a mortgage-decree ; the 
direction in the decree itself is sufficient authority for the sale (Daya- 
chand v. Hemchand, I. L. R.. IV Bom., 515 ; Venltata v. Ramiah, I. L. R., 
1 1 Mad., 108; DiJ 'holts v. Peters, I. L. R., XIV Cal., 631; see also Rule 
No. 349 of 1887, unreported, by MITTEB and BEVEULEY, J J. 



PROVISIONS OF THE PROCEDURE CODE. 179 

liable, shall be inserted in the sale-proclamation, and where LECTURE 
the mortgagee has the carriage of the proceedings, it would Iv - 
be manifestly inequitable to allow him to enforce a mort- 
gage not inserted in the proclamation against a purchaser; 
but the mortgagee is not bound to go out of his way, if the 
property is about to be sold by a third person, to inform the 
Court of his mortgage on pain of being afterwards unable to 
enforce his claim. The subject, however, belongs to the lar- 
ger question of estoppel by conduct ; and to discuss the ques- 
tion adequately would carry me much beyond the limits of 
the present lecture. I shall, however recur to it when I 
come to treat of the extinction together with the priority 
of mortgages. (See Lecture XII.) 

I will now call your attention to section 295 of the Section 295 
Civil Procedure Code, a not very favourable specimen of proce 
legislative workmanship. That section sa} 7 s : Code. 

" Whenever assets are realised, by sale or otherwise, in 
execution of a decree, and more persons than one have, 
prior to the realisation, applied to the Court by which 
such assets are held, for execution of decrees for money 
against the same judgment-debtor, and have not obtained 
satisfaction thereof, the assets, after deducting the costs 
of the realisation, shall be divided rateably among all such 
persons : 

" Provided as follows : 

" (a) When any property is sold subject to a mortgage 
or charge, the mortgagee or incumbrancer shall not, as 
such, be entitled to share in any surplus arising from such 
sale ; 

" (6) When any property is liable to be sold in execution 
of a decree, is subject to a mortgage or charge, the Court 
may, with the assent of the mortgagee or incumbrancer, 
order that the property be sold free from the mortgage or 
charge, giving to the mortgagee or incumbrancer the same 
right against the proceeds of the sale as he had against 
the property sold : 

" (c) When immoveable property is sold in execution of 
a decree ordering its sale for the discharge of an incum- 
brance thereon, the proceeds of sale shall be applied 

" First, in defraying the expenses of the sale ; 

"Secondly, in discharging the interest and principal 
money due on the incumbrance ; 

"Thirdly, in discharging the interest and principal 
monies due on subsequent iucumbrances (if any) ; and 



180 LAW OF MORTGAGE. 

LECTUBE "Fourthly, rateably among the holders of decrees for 

W' money against the judgment-debtor, who have, prior to 

the sale of the said property, applied to the Court which 

made the decree ordering such sale for execution of such 

decrees, and have not obtained satisfaction thereof. 

" If all or any of such assets be paid to a person not 
entitled to receive the same, any person so entitled may 
sue such person to compel him to refund the assets. 

" Nothing in this section affects any right of the Govern- 
ment." 

How con- Now, the first observation which I wish to make on 
strued. ^-^ sec tj on is that the proviso being annexed to a sec- 
tion which gives certain rights to execution-creditors 
must be taken to refer to a mortgagee who is also an 
execution-creditor. Its language also clearly points to a 
case in which there are assets and there are rival judg- 
ment-creditors among whom they have to be distributed. 
The section has, therefore, as, I have already had occasion 
to point out, no application to a case in which the mortga- 
gee is the only creditor who seeks to be paid out of any 
surplus proceeds which may be in the hands of the Court 
as money payable to the mortgagor. (Purmessuree Dossee 
v. Nobinchunder Taiwan, XXIV Suth. W. R., 305.) It 
does not, however, follow, as we have already seen, that the 
court may not, apart from the provisions of the Civil Pro- 
cedure Code, restrain the mortgagee from proceeding against 
such assets, representing, as we must assume that they do, 
the value only of the equity of redemption. But the 
section positively prevents the mortgagee from obtaining 
a rateable distribution with the unsecured creditors if the 
property is sold subject to his mortgage. A question 
may, however, arise whether in a contest between a mort- 
gagee and unsecured creditors, where the money in the 
hands of the Court is not sufficient to pay all the credi- 
tors in full, the mortgagee may not waive his rights under 
his mortgage after the sale has taken place, and insist 
upon sharing in the purchase-money as an ordinary credi- 
tor. You will observe that in such cases considerations 
arise somewhat analogous to, but of a slightly different 
nature from, those which would arise if the contest was 
solely confined between the debtor and the mortgagee. 
The law seems to be anxious to guard against a wanton 
sacrifice of the rights of the unsecured creditors, and, on a 
principle based on natural equity which I shall explain at 



REMEDIES FOR MORTGAGOR. 181 

some length in a future lecture, the mortgagee is not LECTUBE 
permitted to share in the purchase-money which we must IV - 
not forget, is paid only for a partial interest in the estate, 
that is, the equity of redemption. The mortgagee possesses 
in his mortgage ample security for the realisation of the 
debt due to him and his rights are not in any way pre- 
judiced by a refusal to give him a share of the proceeds; 
while very grave injustice might be done, both to the 
other creditors and the mortgagor, if the unsecured credi- 
tors could be disappointed by the action of the mortgagee. 
It seems to me that the section has been enacted for the 
protection of the unsecured creditors, and the doctrine of 
waiver, therefore, would not apply. It is true, there are 
certain expressions in the judgment of the court in Fakir 
Bux v. Chutter Dhari (XIV Suth. W. R, 209) which may 
seem to support a contrary view. But I venture to think, 
notwithstanding the very high authority of the learned 
judge by whom the judgment was deli veved, that the d/ictum 
cannot be supported as laying down an inflexible rule. 

It may be said that neither the disappointed creditors- Remedies 
nor the mortgagor would be wholly without a remedy, in gag rt " 
case a portion of the purchase-money was paid away 
to the mortgagee as they would be entitled to the benefit 
of the lien to the extent to which it might be reduced by 
the conduct of the mortgagee, and that the conflicting, 
equities between the parties might be worked out in an 
action properly brought for the purpose. But such a 
proceeding, besides being wholly unknown in the mofussil, 
would only lead to a perfect waste of litigation which, how- 
ever, may be easily avoided without trenching upon the 
domain of the Legislature. I am also not insensible to the 
force of the argument founded on the well known maxim 
expressio unius est exclusio alterius ; but I cannot persuade 
myself that the Legislature intended to take away all 
discretion from the court as to the mode in which its 
decrees should be enforced (p). 

The question as to what is meant by "sold subject Sale of 
to a mortgage " has again given rise to considerable P r P ertv 

(p) I confess that the introduction of the words "as such" in pro- 
viso (a) to section 295 which were absent from the former Civil Pro- 
cedure Code are likely to create some embarrassment, and the probabi- 
lity is very great, indeed, that the addition of these words is due to the 
judgment of the Calcutta High Court in Fakir Sux v. C'mtterdhari 
Chowdhrij (XIV Suth. W. R., 209), to which I have had already occa- 
sion to refer. 



182 LAW OF MORTGAGE. 

LECTURE discussion. In the case of Fakir Bux v. Ckutterdharee 
IV - Chowdhry (XIV W. R., 209-10), the Court observed: 
subject to "We think that section 271, Act VIII of 1859, or rather 
mortgage, the proviso in that section, is intended to apply to a case 
where the property is actually sold subject to a mort- 
gage, and where the transaction is such that the purchaser 
is buying the property subject to the mortgage, where he 
is, in fact, only buying the equity of redemption which 
remains in the judgment-debtor; and it does not apply 
to a case where there is merely the right by law in the 
mortgagee to enforce his mortgage against the purchaser. 
This appears to have been the view taken by this Court 
in a decision reported in VI Suth. W. R,, Mis. Rul., 13. 
Section 271 There the Court says : ' It is not equitable that the 
of 1859. purchaser who purchased and paid for only the mort- 
gagor's interest in this property, should hold it released 
from Gregory's lien.' Now, here it does not appear that 
the sale to the purchaser was in fact subject to the mortgage. 
By ' in fact ' we mean that it was not so subject by the 
contract of sale, and there was merely a legal right existing 
which might be capable of being enforced. It seems that a 
petition which was presented by the present appellant was 
not taken notice of, and neither in the proclamation of sale, 
nor in any of the sale proceedings, is mention made of the 
existence of any mortgage. Nor is there anything to show 
that only a limited right of the judgment-debtor was to 
be sold. Therefore, upon that construction of section 271, 
we should say that the proviso does not apply to the 
present case "(<?). 

It would, therefore, seem that the mortgagee may, even 
without waiving his rights as such, claim a share of the pur- 
chase-money, disappointing to that extent the unsecured 
creditors, although the purchaser bought with full know- 
ledge that the property was subject to a mortgage and 
that all that the Court sold or was authorised to sell was 
only the mortgagor's right of redemption, and although 
the purchaser paid a price regulated by the value of such 
interest. It seems to me, however, that the words ' sold 
subject to mortgage ' may be read in a less narrow sense, 
without doing violence to the language of the section, as 

(q) As to the former state of the law on the subject, see Wonmasoon, 
darce v. Chomdhry Ruglwnatli, S. D. A., 1860. Vol. II., 35 ; Skeolaksk v- 
Slicochurnlal, S. D. A., 1858, p. 498 ; Karorlal v. ataram,S, D. A., 1867. 
p. 953. 



PURCHASE FOR VALUE WITHOUT NOTICE. 183 

embracing cases in which the property which is sold is, in LECTUBE 
fact, subject to a mortgage, although owing to insufficient 
information or other causes, the property is not sold by the 
Court expressly subject to the mortgage. You must remem- 
ber that an execution-purchaser ordinarily buys what the Defence of 
judgment-debtor himself could have honestly sold, and we p"^* 
are therefore,not embarrassed by considerations which might for value 
arise in the case of a bond fide purchaser lor value without Wlf |>out 

L' f -L j.- if i i ii i. "otice not 

notice or any subsisting mortgage. Ir, indeed, the contest available, 
was one between the mortgagee and a third person who 
had induced an honest purchaser to lay out money in tho 
bond fide belief, that he was purchasing the property free 
of all incumbrances, a narrower construction might be 
supported on the ground that it tended to prevent acircuity 
of action, for, the consequence of refusing the mortgagee to 
share in the distribution, would be to throw him upon 
the mortgaged property, with the further consequence that 
the purchaser would have a right to compel the unsecured 
creditor to refund a portion of the purchase-money equal 
to the amount of the mortgage-debt. The principle is well 
illustrated by the judgment of the Privy Council in the Douglat 
case of Douglas v. The Collector of Benares, in which the elector of 
defendant, with full notice of the plaintiff's mortgage, Benares. 
having sold certain property as unincumbered, the plaintiff 
brought an action against the defendant, claiming to be 
entitled to the sale-proceeds by virtue of his mortgage, 
Their Lordships held that the plaintiff had a clear equity 
against the proceeds in the hands of the defendant and 
this, upon the most obvious principles of moral justice, re- 
cognised and acted on as safe grounds of decision by the 
Court of Chancery in England. With reference to the 
argument that the defendant only sold the interest of the 
debtor and did not guarantee the title, their Lordships 
say : " This may be very true, but it has no bearing upon 
the present case. Here the Government officer, having 
notice of an incumbrance, which is only an equitable 
charge on the property, suppresses all mention of it in the 
advertisement of sale and conveys away the estate to the 
purchasers as unincumbered, and receives the full value as 
if it were free from mortgage. Can there be a clearer equity 
to call for repayment ? or could there be a grosser injustice 
than to sue the purchasers if, indeed, against them any case 
could be established, which is very doubtful ?" (Douglas 
v. The Collector of Benares, V Moore's Ind. App., 296). 



184 LAW OF MORTGAGE. 

LECTURE It is instructive to notice that a similar principle is 
IV - recognised in systems founded on Roman law. Thus, it is 
Roman law stated by Mr. Burge in his Foreign and Colonial Law : ' It 
on the has been already observed that the price obtained by the 
debtor from the sale of the mortgaged property is not 
subrogated for the property sold, and, therefore, is not sub- 
ject to the mortgage. The action in rem could, there- 
fore, according to the strictness of the law, be instituted 
only against the last possessor of the property, if it had 
passed through mawy hands. It was, however, decided by 
the Supreme Court of Holland on principles of equity, and 
to avoid circuitous litigation and its consequent expense, 
that the creditor could resort to the first possessor to re-, 
cover the price, if it were made to appear that the fourth 
possessor could sustain an action for the eviction against 
the third, the third against the second, and the second 
against the first." (Barge's Foreign and Colonial Law, 
Vol. Ill, pp. 224-25.) 

Section 295 Another difficulty which was felt in construing the cor- 
cedure Pr " responding section of the Civil Procedure Code of 1859, is 
Code how also likely to arise on the language of section 295 of the pre- 
construed. seu ^ Code of Civil Procedure, which makes no exception in 
favour of a mortgagee when the property pledged to him is 
sold by the Court under a decree for sale. According to the 
strict wording of the section, a mortgagee would be in no 
better position than an unsecured creditor, the assets being 
liable to be rateably distributed among all the execution- 
creditors whether mortgagees or not. It cannot, however, 
be denied that when the property is sold at the instance of 
the mortgagee, his claim should be preferred, and yet the 
language of the section would seem to leave no dis- 
cretion to the court of execution in the matter. The 
rule, however, is one merely of procedure, and cannot 
alter or limit the rights which a person may have 
acquired by contract, independently of the rules em- 
bodied in the Code of Civil Procedure. (Raj Chundra 
Shaha v. Bur Molmn Roy, XXII Suth. W. R, 98; 
Harsoon A rra Begum v. Jawadoonnissa Satooda Khan- 
dan, I. L. R., IV Gal., 29 ). It seems to me that the whole 
Chapter on Execution in the Civil Procedure Code relates 
to sales in execution of decrees for money, and not to sales 
under mortgage-decrees. The same defect was noticed 
in the old Code, but has not yet been rectified by the 
Legislature. 



PROVISIONS OF THE PROCEDURE CODE. 185 

A question of some nicety upon the construction of LECTURE 
section 295 of the Civil Procedure Code arose in the 
case of Siva Ram v. Soohrah Manya (I. L. R., IX Mad., 57). Madras 
It appears that certain land was mortgaged to the defend- case 
smt to secure the repayment of a loan of Rs. 2,000 and ' ie p01 ' 
interest. The mortgagee was to be let into possession, it 
being stipulated in the deed that the interest on the debt 
should be paid out of the profits and the balance paid to the 
mortgagors. By a subsequent agreement, however, it was 
arranged, that the mortgagors should remain in possession 
and pay an annual rent, equal to the interest payable to the 
mortgagee. The mortgagee obtained a decree for Rs. 2,000, 
.and arrears of rents and costs, and for the sale of the land 
in satisfaction of the amount decreed. The land was sold 
for Rs. 2,855. A puisne mortgagee applied to the Court 
for payment to him of Rs. 500 out of this sum, alleging that 
the first mortgagee was entitled only to Rs. 2,000, and 
Rs. 280 costs, but not to arrears of rent in preference to 
his claim as second mortgagee. It was contended on be- 
half of the first mortgagee that he was entitled to treat 
the arrears of rent as interest; but this contention was over- 
ruled. The Court said : "The appellant, as second incum- 
brancer, is clearly entitled to the surplus proceeds after 
discharging the principal and any interest which may 
be due on the respondent's incumbrance. The question 
between them, therefore, resolves itself into this : Can the 
sum claimed by the respondent as rent, and paid to him 
under the decree for rent, be regarded as interest due on 
his incumbrance ? It appears to us that it cannot ; and 
indeed both the lower courts have treated it as rent and 
not as interest. By letting the mortgaged properties to 
the mortgagors under the stipulation that they should 
pay rent in lieu of interest, the respondent elected to con- 
vert the interest into rent. No doubt such a course has 
its advantages ; but he is not entitled to those advantages, 
and also to the advantage of treating the sum conditioned 
to be paid as if it were interest. He sued for it as rent, 
and not as interest; and under the terms of the decree, 
directing the sale of the property, the sum now in question 
was awarded to him as rent. There is no foundation for 
the contention that the arrears of rent are a charge on the 
land as against an incumbrance (I. L. R., IX Mad., 60) (r). 

(?) The judgment, however, is scarcely consistent with the decision of 
Jessel, M. 11 , in Islieneood. Exp. (XXII., Ch. D., 38i), in which it waa 



186 LAW OF MORTGAGE. 

LECTURE I have already said that a sale by an unsecured creditor 
IV - passes only the equity of redemption. There may, how- 
Madhmu- ever, be cases in which the purchaser would acquire a higher 
dan \. MU- \-\cr\\i. Th us, for instance, in the case of Mudhusudan 
kundMi. Sing v Mukundloll SaJwo (XXIII Suth. W. R., 373), where 
execution was taken out by one of the creditors against an 
estate which was subject to a mortgage in favour of another 
creditor, who also had placed an attachment on the property, 
and the property was subsequently sold at the instance of 
the first creditor, but without any mention of the mortgage, 
it was held by the Court that what passed to the pur- 
chaser under the sale was not the bare equity of redemption, 
but the pro pert} 7 itself, free of the mortgage held by the other 
creditor; and the case of Nadir Hussen v. Baboo Pearoo 
(XIX Suth. W. R., 255), lays down still more broadly that 
when an estate is sold pending an attachment by the mort- 
gagee, the lien is transferred from the property to the 
purchase-money, and the purchaser acquires the property 
discharged from the lien. (See also Raj Chundra Shaha v. 
Horimohun Roy, XXII Suth. W. R., 98; but see Janaki 
Bullav Sen v. Jahoruddin Mohamad A boo A li Sohor Chow- 
dury, I. L. R., X Cal., 567; Stowell v. Ajudheya Nath, I. L. R., 
VI All., 255.) The rule laid down in Mudhusudan Sing's 
Case is likely to prevent, in some measure, the evils which 
attend most sales in execution in this country, it being by 
no means an uncommon thing for the same property to be 
sold successively four or five times, first, perhaps, by an un- 
secured creditor, and then by the mortgage-creditors of the 
debtor ; the third mortgagee probably coming in first, then 
the second mortgagee, the first mortgagee closing the scene; 
and this, although execution had been actually taken out 
and the property attached by the different creditors, before 
it was sold at the instance of the unsecured creditor. 
Right of I will conclude the present lecture with a few gene- 
ra j observations on the security to which the mort- 
g a gee becomes entitled under an ordinary simple mort- 
gage. Now, it is necessary to bear in mind that a simple 
mortgage creates a real right, and that the defence of 
purchase for value without notice is not, therefore, appli- 
cable to a suit by a mortgagee to enforce his security. 

held that notwithstanding the insertion of an attornment clause in a 
mortgage-deed, the real relation between the parties is not that of land- 
lord and tenant, but mortgagee aud mortgagor. Cf . Venltata v. Kesliciba, 
I. L. R., II. Mad , 187. 



RIGHTS OF SIMPLE MORTGAGEE. 187 

If I sell my property to you to-day, and sell it again to a LECTURE 
third person to-morrow, it cannot be denied that the second IV - 
purchaser, although he should buy without any notice of 
the sale to you, will have no defence to an action of eject- 
ment brought by you. But the case would be different if 
I only agreed to sell, and did not actually convey the pro- 
perty to you ; you would then acquire a right riot in rein 
but only in personam. But equity holds the conscience of 
a purchaser with notice bound by the agreement, thus 
engrafting an exception on the rule that a mere right in 
personam is not enforcible against third persons ; but 
equity stops there, and does not extend the exception 
against a purchaser for value without notice. The doctrine 
of the Court of Chancery, instead of derogating in any way 
from the rights of a person who claims under a conveyance, 
and not under a contract, rather invests a person, in cer- 
tain cases, whose title depends entirely upon a contract, with 
the same rights as if he had obtained an actual conveyance ; 
but it does so only as against a purchaser with notice. Thus, 
for instance, if some solemnity, which is deemed by the com- 
mon law to be essential to the validity of a conveyance, is 
omitted, the document will be unavailable as a conveyance ; 
but equity would treat it as an agreement which it would 
enforce, not only against the person who entered into the 
transaction, but also against a volunteer or a purchaser with 
notice. (See Austin's Jurisprudence, Yol I, 377.) I have 
already endeavoured to explain the origin of this doctrine, 
and will here only add that, as a general rule, the defence is not 
allowed when the right sought to be enforced is a legal right, 
and not one which is recognised only by equity. (Snell's 
Equity, pp. 23 30). It does not fall within the province of 
these lectures to explain the doctrine at length, and if I recur 
to it, it is only because its somewhat indiscriminate applica- 
tion in this country has attracted to it a cloud of prejudice 
much of which, when kept within reasonable limits, the 
doctrine certainly does not deserve. The real truth seems 
to be, that the doctrine is in some measure a "survival," and 
points to times when a conveyance was a transaction which 
could never take place secretly, while a mere agreement 
was not attended with any such publicity. In these days, 
when the title to real property passes by mere writing, 
or even by word of mouth, a conveyance may be attended 
with as little publicity as an agreement to transfer at a 
future time, and it is this feeling, apparently, which has 



188 



LAW OF MORTGAGE. 



LECTURE sometimes led to the extension of the doctrine to real rights 



IV. 



Security 

available 

against 

purchaser 

for value 

without 

notice. 



In all enlightened systems of jurisprudence, however, the 
somewhat cumbrous formalities which our forefathers in- 
sisted upon as a protection against fraudulent practices, 
are gradually giving way to a system of registration of 
assurances. 

The question whether a security is available against a 
purchaser from the mortgagor without notice of it, was 
raised in the Calcutta High Court in the case of Maharajah 
Moheshur Bux Singh Bahadoor v. Bhikha Chowdhry, (V 
Suth. W. R., 63) and was answered in the affirmative. Sir 
Barnes Peacock, in giving the judgment of the Full Bench, 
observed : " As to the second ground which has been raised 
for our opinion, namely, that the purchaser under the bill 
of sale was a bond fide purchaser without notice, and, there- 
fore, entitled to priority, if the bond was really and bond 
fide executed before the date of the defendant's purchase, it 
would prlmd facie be entitled to priority, and the defendant 
could not, according to the decision in the case of Vardon 
Seth Sam v. Luckpatliy Royjee Lallah (Marshall's Reports, 
p. 461), succeed without proof that he was a bond fide pur- 
chaser for value without notice. But, even if the defendant 
were to satisfy the Court upon that point, he would not, in 
my opinion, be entitled to priority, unless the plaintiff was 
bound to give notice of his bond. If he was not bound to 
register it in order to retain priority over subsequent pur- 
chasers for value, I do not see what notice he could give, 
or was bound to give. The mere charge upon an estate 
does not give a right to the possession of title-deeds ; and 
even if it would, the plaintiff in the present case had a 
charge, not upon the entire estate, but only on one or two 
villages, which would not give him a right to the posses- 
sion of the title-deeds to the whole estate. 

" But if the defendant should prove that he was a bond 
fide purchaser for value, he would throw the onus on the 
plaintiff of proving that he actually advanced the money 
as alleged in the bond creating the charge, and that the 
bond was executed before the defendant's purchase." See 
also Golla Chinna v. Kali Appiah, IV Mad. H. C. Rep. 
434 ; tiadagopa v. Ruthna, IV Mad. H. C. Rep., 457) (s). 

() It seems that in the systems which are founded on the civil law, a 
purchase in good faith and for a valuable consideration, is no defence to 
a suit by a mortgagee to enforce his security. If the property comprised 
in a special mortgage were transferred to a purchaser for a valuable 



LIMITATION. ] 89 

Mr. Justice Campbell, who was of a different opinion, LECTURE 
pointed to the " frightful consequences which may result IV< 
if it be established as law that a lien on real property, with- 
out either publication or possession, will suffice to defeat 
the most cautious purchaser." " I should fear," adds the 
learned Judge, "that in this country the result would be 
an entire insecurity of title ; that it would be impossible 
for any man by any amount of caution to buy real property 
with any confidence or any security that secret lien-holders 
may not start up with documents (or, possibly, even assert- 
ing verbal engagements) proved, as proof here goes, and 
which he cannot disprove, and may defeat or harass him." 
(V Suth. W. R., 67.) 

It is impossible to deny that there is a good deal of 
truth in these observations. In countries where the Roman 
doctrine of hypothecation obtains, the evil is guarded 
against by the device of public hypothec books, and the 
same purpose is served by the new system of registration 
which has been introduced into this country since the pass- 
ing of Act XV I of 1864. 

The fact that hypothecation confers a right in rem seems Period 
also to have been overlooked in some of the earlier cases wit . hin 
on the Statue of Limitations, in which it was held that a security 
mortgagee was bound to enforce his security within the mustbe 
time prescribed for suits for breaches of contracts. (Seetul e " 
Singh v. Baboo Sooraj Bux, VI. Suth. W. R., 818, since over- 
ruled. See Sanuar Hossein v. Shazada Golam Mohamed, 
IX Suth. W. R., 170.) In the last case it was held that a 
suit to enforce a security, is a suit to recover an interest in 
immoveable property within the meaning of clause 12 of 
the first section of Act XIV of 1859. It must not, how- 
ever, be understood that the like extended period was 
allowed to the mortgagee to sue on the covenant which 
had to be enforced within the same period as any other con- 
tract. (Munnoo Loll v. Pigue, X Suth. W. R., 379 ; Pearee 
Mohun Bose v.Gobind Chunder Auddy, X Suth. W. R., 56.) 
Act IX of 1871 in Article 132, Schedule ii,. expressly provid- 
ed for suits " for money charged upon immoveable property 
and the period of limitation was twelve years from the 
time when the money became due. It was, however, long 

consideration bond fide, even although he had no notice of the existence of 
this mortgage, it still remained liable to the mortgage (Surge's Foreign 
and Colonial Law. Vol. III., p. 200). But not so in the case of a general 
mortgage. (Cf. Ramsidh v. Balgovind, I. L. R., IX All., 158.) 



190 LAW OF MORTGAGE. 

LECTURE doubtful whether, as under the old law, the remedy on 
1V - the covenant must not still be sought within the period 
prescribed for contracts. The doubt was at length set at 
rest by the decision of the Judicial Committee of the Privy 
Council in the case of Ramdin v. Kalka Pershad (L. R., XII 
I. A, 12 ; I. L. R., VII AIL, 502). Act IX of 1871 has been 
replaced by Act XV of 1877, and the phraseology of the 
Article somewhat altered ; and it has been held that the 
language of the present Act leaves no room for doubt that 
the longer period is not applicable to an action on the co- 
venant (t). (Miller v. Rungo Nath Moulick, I. L. R., XII 
Cal, 389 ; Sheshayya v. Annamma, I. L. R., X Mad., 100.) 
I may, however, mention that a different view has 
been taken of a similar section in the English Statute. 
In Button v. Button (XXII Ch. D., 511) it was held that 
the limitation of twelve years imposed by the Eeal Property 
Limitation Act of 1874, section 8, on actions and suits for the 
recovery of money charged on land applies to the personal 
remedy on the covenant in a mortgage-deed as well as to 
the remedy against the land. It is true that in that case 
it was argued that an action on the covenant could be 
brought after a suit against the laud was barred, but I do 
not think that that ought to make any difference. The 
Court said that they could not read the words "sum of 
money secured by any mortgage," not as meaning a sum 
which is secured, but a sum of money so far as it is secured. 
That would be construing the language of the Act in a 
non-literal sense, there being no reason whatever why the 
Court should not keep to the plain words of the Statute. 
I must confess that the Court in coming to this conclusion, 
gave some reasons which would not apply to the Indian 
Limitation Act, but at the same time they had to face a 
difficulty created by the preamble of the English Act which 
is altogether absent from our Statute. (Compare XXII 
Ch. D., p. 579 ; see Khemji Bhagvandas v. Rama, I. L. R., X 
Bom., 519.) 

The difficulties which have been felt in England as to the 
period for which arrears of interest are recoverable to- 
gether with the distinction between suits for redemption 
by the mortgagor and actions or suits by the mortgagee, 
have not arisen in India, where it has been held that the 
period of limitation applicable to the principal is also 

() See, further, on the subject of limitation generally, App., Statutes 
tit., Limitation. 



JURISDICTION. 191 

applicable to arrears of interest. (Gunput v. Adarji, LECTURE 
I. L. R., Til. Bom., 312 ; Davani v. Ratna, VI Mad., 417 ; IV - 
Baldeo v. Gokul, I. L R., I. AIL, 603.) 

A fresh difficulty has, however, been created by the provi- 
sions of section 147 of the present Act, the language of the 
Statute making it extremely difficult to say whether a suit 
for sale by a simple mortgagee comes under the sixty or 
twelve years' rule (it). (Aliba v. Nanu, I. L. R., IX 
Mad., 218 ; Khemji Bhagvandas v. Mama, I. L. R., X 
Bom., 519 ; Shib Lai v. Ganga Prasad, I. L. R., VI 
All., 551 ; see also Girwar Singh v. Thakur Narain, I. L. R., 
XIV Gal., 730 (F. B.) ; cf. Govind v. Kalnak, I. L. R., 
X Bom., 592 ; distinguish Ramsidh v. Balgovind, I. L. R., 
IX All., 158.) 

It follows from what I have said as to the nature of the Court in 
right created by a simple mortgage, that a suit to enforce a ^ 1 " r c t h a 
mortgage on land must, like any other suit for land, be must sue. 
brought in the Court within whose jurisdiction the land is 
situated, although the remedy on the covenant may have 
to be sought in a different forum. There is indeed a case 
at IX Bom. H. C. Rep., 12, ( Tenlcoba v. Rambhaji,) in which 
a different view is taken ; but, I presume, it cannot be 
supported. 

It is one of the cardinal principles of law that the forum 
sitce is the only one in which all rights concerning land 
must be tried; and this principle has been adopted by the 
Legislature in our Civil Procedure Code. It is true that 
the English Courts sometimes indirectly deal with rights 
in foreign land by affecting to act in personam. Thus 
the English Court of Chancery assumes jurisdiction to make 
a decree for foreclosure of lands outside the country, on 
the ground that a foreclosure-decree is only a decree in 
personam, depriving the mortgagor of his personal right 
to redeem. But this jurisdiction, which rests upon a 
somewhat doubtful basis, has been disclaimed by our 
Courts in which a decree, whether for sale or for fore- 
closure, has been almost uniformly regarded as a decree in 
rem, and, therefore, incapable of being made in any Court 
other than that within whose local limits the land is situat- 
ed. (Bebee Jaun v.Mirza Mahomed Hadse, I Ind. Jur.,N. S., 
40 ; Chetti Gaundan v. Sundaram Pillai, II Mad. H. C. 
Rep., 51 ; Guneswar Lass v. Mahabar Singh, I. L. R., I Cal., 

(?/) As to what constitutes a simple mortgage, see notes to sec. 58 of 
the Transfer of Property Act. 



192 LAW OF MORTGAGE. , 

LECTURE 163 ; Sree Matty Lall Money Dassee v. Jadu Natli Shaw, I 
IV - Ind. Jur., N. S., 319; In the Matter of S. J. Leslie v. The 

Land Mortgage Bank of India, Ld., VIII Sutli. W. R., 269 ; 

IX Ben. L. Rep., 171 ; Mussamut Amidi v. Debi Prosad, 
XVII Suth. W. R., 287 ; Begum Mahomed Khalil v. Mua- 
sumut Sona Koer, XXIII Suth. W. R., 123 ; Bui Deo Doss v. 
Mussumut Mul Koer, II All. H. C. Rep., 19. Compare Syed 
Nadir Hossain v. Pearoo Tafildarinee, XIV Ben. L. Rep., 
425, note; XIX Suth. W. R., 255 ; Raghunath Doss v. Kakan 
Mai, I. L. R., Ill All., 568. Compare Sarup Chunder 
Guha v. Amirun Niess Khatoon, I. L. R., VIII Cal., 703. 
Private International Jurisprudence by J. A. Foote 
120 137. See also as to the proper forum in which to 
recover a debt made a charge on foreign territory, Doss 
v. Secretary of State for India, L. R. XIX Eq. 507535). 
Conflicting As the law was understood before the Full Bench Ruling 
)U8< in Haran Chandra Ghose's Case (XXIII Suth. W. R, 187), 
it was of the utmost importance to the plaintiff to bring his 
suit in the proper Court, as no other Court than that within 
whose jurisdiction the land was situated could make a 
decree for a sale of the mortgaged property ; and this declara- 
tion was as a rule sought by the mortgagee, although tho 
mortgagor had not in any way parted with his interest in 
the property, either by a sale or a second mortgage. It is 
true that, according to the recent authorities, a mere money- 
decree is, as between the parties, as good as a decree for 
sale ; but the mortgagee would certainly act prudently in 
expressly asking for the usual decree for sale, which, as I 
have already explained, can only be made by the Court 
within whose local limits the land is situated. 

Question of Besides questions of territorial jurisdiction, as it is called, 
jurisdic-" V questions of pecuniary jurisdiction also sometimes arise 
tion. in suits to enforce a mortgage-security. The general rule, 
no doubt, on the subject is that the value of the subject- 
matter in dispute determines the forum in which the action 
should be brought. In an action by a mortgagee upon his 
security, the value of the subject-matter must depend on 
two considerations, the amount of the debt, and the value 
of the property which the mortgagee seeks to make avail- 
able for the satisfaction of the debt. If the value of the 
mortgaged property exceeds the amount of the mortgage- 
debt, the value of the subject-matter in dispute must be the 
amount of the mortgage-debt, for the subject of the suit is 
not the property itself, but the right to make it available 



PECUNIARY JURISDICTION. 193 

for the satisfaction of the mortgage. But where the value LECTUEB 
of the property is less than the amount of the charge, the IV - 
subject-matter is the right to make the property available 
so far as it will suffice, and, as it cannot suffice to satisfy more 
than a sum proportionate to its value, the value of the sub- 
ject-matter of the suit must be determined by the value of 
the property. (Krishnama v. Srinivasa, I. L. R., IV Mad., 
339 ; JanJd Dass v. Budri Nath, I. L, R., II All., 698.) Of 
course, the last observation only applies where the proceed- 
ings are merely in rem. For other instances of the difficul- 
ties inseparable from the system of regulating jurisdiction by 
value, see Mana Vikrama, Zamorin of Calicut v. Soorya 
Narayana Bhatta, I. L. R, V Mad., 284 ; Marakar v. 
Munhorali, I. L. R., VI Mad., 140 ; Amanat Begam v. 
Bhajan Lai, I. L. R., VIII All., 438. ; Rup Chand v. Bal- 
vunt, I. L. R., XI Bom., 591. 



R. B. G., M. 13 



LECTURE V. 



Mortgage by conditional sale Differences in form between conditional sale 
and English mortgages Differences between mortgages by conditional 
sale and sales with clause for re-purchase Question of intention Cove- 
nant by the mortgagor upon which he might be sued by the mortgagee 
True rule of construction No personal liability of the mortgagor 
Nature of the Dristi-bundhuk and Gahen Lahen Rights of the mort- 
gagee Personal liability of mortgagor not to be presumed in the absence 
of express covenant Construction of the Sudder Dewany Adalut 
Implied warranty of title by mortgagor Remedy for breach of warran- 
ty Leading case on the point Measure of damages in England 
Remedy for defective title of mortgagor Remedy when security is in- 
sufficient Remedy of mortgagee when pledge is accidentally destroyed 
Principle upon which damages should be assessed Right of mortgagee 
to prevent waste when security is insufficient Failure to pay by 
appointed time Regulation XVII of 1806 Process of foreclosure in 
Bengal Stipulated period Shoroshee Bala Dabee's Case Forfeiture 
for breach of any conditfon Application to follow demand for pay- 
ment The mortgage must be foreclosed as a whole Case of joint 
mortgagors Court to which application must be made Duty of court 
on receiving application Meaning of " Legal representatives " Notice 
Purchaser of part of property and attachment creditor, both legal repre- 
sentatives Notice to be served on whom Case of intestacy Case of 
more than one mortgagor Who are not entitled to notice Provisions 
of the Regulation mandatory and not merely directory Distinction 
between mandatory and directory enactments View of the Allahabad 
High Court What the notice ought to contain Proceedings under the 
Regulation merely ministerial Regular suit Forbes v. Amerunessa Title 
of the mortgagee Right to recover rents Nature of the restrictions 
imposed by the Regulation Denonatb Gangooly's Case Process of 
foreclosure elsewhere than in Bengal, moulded on the practice of the 
English Court of Chancery Whether a mortgagee can pursue his reme- 
dies concurrently Right of mortgagee to possession immediately on 
default, how far qualified in Bengal by Regulation XVII of 106 Limita- 
tion Act XIV of 1859 Cause of action what Possession of the 
mortgagor when permissive Mortgagee's cause of action before fore- 
closure Rights of mortgagor transferred to third party Trespasser 
holding adversely to both mortgagor and mortgagee Acts IX of 1871 
and XV of 1877. 

Mortgage A mortgage by conditional sale is, as its name denotes, 
tionaTsaie. a conditional conveyance of land as a security for the 
repayment of a loan " with a stipulation that if the money 
borrowed be not paid, with or without interest, by a cer- 
tain day, the sale shall become absolute." It resembles very 
closely in form an English mortgage, both of them belong- 
ing to that class of securities in which the property pledg- 
ed is liable to pass from the debtor to the creditor on 



MORTGAGE BY CONDITIONAL SALE. 195 

default of payment. They are, therefore, generally treated LECTURE 
as analogous. (Khelut Chunder Ghose v. Tarachurn Koon- 
doo, VI Suth. W. R., 269; Shorosheebala v. Nundolal, 
XIII Suth. W. R., 364; V Ben. L. Rep., 389; Manly v. 
Patterson, I. L. R., VII Cal., 394 ; (a) Shurnomoyee v. 
Srinath Das, I. L. R., XII Cal., 614.) There is, however, 
one important distinction between the two. In an English 
mortgage, the mortgagor gives a covenant for the payment 
of the debt, and, even if no such covenant is given, a 
debt is created by implication. But, in a mortgage by 
conditional sale in this country, the mortgagor does not 
make himself personally liable for the payment of the mort- 
gage-money (6). There is, again, some difference in the 
form of the instruments. In an English mortgage the owner- 
ship is wholly transferred to the creditor, liable, however, to 
be divested by the repayment of the loan on the appointed 
day. The English mortgagor says to his creditor, " I sell 
my property to you, but if I repay the debt by a certain 
day, the conveyance shall be void or ( as is now generally 
the case) you shall re-convey the property to me." In the 
Indian mortgage, on the other hand, the creditor acquires 
only a qualified ownership, which, however, by the terms 
of the agreement ripens into absolute proprietorship imme- 
diately on the default of the mortgagor. In the English 
mortgage, therefore, the mortgagee, by the terms of the 
agreement, has the right to enter upon possession of the 
property mortgaged to him, immediately upon the execution 
of the deed ; but the mortgagee under a conditional sale 
has, generally speaking, no such right. The possession of 

(a) In this case, the plaintiff prayed for foreclosure or sale, and, in 
the event of the proceeds being insufficient, for a personal decree against 
the defendant for the amount of the deficiency ; but the Court refused 
to grant the latter part of the prayer, on the ground that the suit was 
in the nature of a foreclosure suit. I may mention that the mortgage- 
deed did not contain a covenant to pay, but this was apparently regard- 
ed as immaterial, as the mortgage was in the ordinary English 
form. It was contended by the mortgagor that as no proceedings had 
been taken under Regulation XVII of 1806, the mortgagee was not 
entitled to foreclose; but the Court, without expressing any opinion on 
the poinb, ordered a sale instead of a foreclosure, unless the money was 
paid within one year from the date of the original decree, by analogy 
to the provisions of Regulation XVII of 1806. There can be very little 
doubt, however, that if an English mortgagee wishes to foreclose a 
mortgage in the mufussal, he must take proceedings under the Regu- 
lation. (See the cases cited above.) 

(J) A conditional sale in this country is analogous to an English 
mortgage by trustees under a power, where there is no cestigue trust to 
enter into the usual covenants. 



196 LAW OF MORTGAGE. 

LECTURE the mortgagor is, therefore, generally protected in an 
v - English mortgage by a covenant for quiet enjoyment till 
default, a covenant which, as a rule, would be wholly 
superfluous in an Indian mortgage, for the simple reason 
that with us only a qualified ownership passes to the 
mortgagee, which before default does not carry with it 
the right to the possession of the property. 

English A practice, however, obtains in this country, which also 
' age ' seems to have prevailed in England in former times, by 
which the debtor executes a deed purporting on the face of 
it to be an absolute conveyance, the creditor, on the other 
hand, engaging to re-convey the property to the debtor on 
repayment of the loan. In such cases the conditional sale 
differs but very little in form from an English mortgage. 
The practice, however, is open to very serious objection, 
and in gradually dying out. 

Redeem- In the case of Rajah Heera Singh (N.-W. P., Vol. VIII, 

mortgage ' P' 564), where there was an absolute sale together with an 
agreement by the purchaser to re-convey the property, if 
the purchase-money, together with interest, were paid by a 
certain day, it was contended that the transaction between 
the parties was not a mortgage, but only " a redeemable 
sale," and, therefore, not subject to the rules relating to 
mortgages. The Court, however, held that a redeemable 
sale was identical with a mortgage, and that the vendor in a 
redeemable sale had an equity of redemption which must 
be foreclosed in the same way as in the case of an ordinary 
mortgage. (See also Arman Pandey v. Norrotun Kumvar, 
III Macnaghten's Sel. Rep., 78. Of. Oholam Russool v. 
Fufjo, IV and V Agra H. C. Rep., 129 ; Imdad v. Mannu, 
I. L. R., Ill All., 509.) 

Difference There can be no doubt that the case was correctly decided ; 

between but the proposition about " redeemable sales " is stated in 

mortgage { i > , , > -r, 

and re- terms winch are somewhat unnecessarily broad. It is true 

^ ia * ^ e "ghts f tne mortgagor may not be defeated under 
colour of a redeemable sale ; but care must be taken to dis- 
tinguish a mortgage from a bond fide sale with a clause 
for re-purchase. The two things resemble one another 
closely in form, but differ widely in their incidents. If 
there is a bond fide sale with a condition for re-purchase, 
the power must be exercised strictly in compliance with 
the terms of the condition, while in the case of a mort- 
gage, a failure to fulfil the strict terms of the agreement 
is not immediately followed by a forfeiture of the property. 



SALE WITH CLAUSIfi FOR RE-PUHCHASE. 197 

The reason for this distinction is, that in the case of a LECTURE 
bond fide sale with an option to the vendor to re-purchase v - 
within a given time, there is no equity whatever to relieve 
against the sale, the rights of the purchaser being entitled 
to protection equally with those of the vendor; while in 
the case of a mortgage the transaction is regarded only as 
a security, and the mortgagee is sufficient!}" compensated 
by receiving interest in default of payment at the appoint- 
ed time. The distinction is illustrated in several English 
cases, in which Courts of Equity, notwithstanding the 
jealousy with which such transactions are viewed, have 
refused to relieve the vendor from the consequences of his 
own default, and it has been acted upon by our own Courts 
in more than one reported case. (Rajah Lakshmi Chelliah 
Garu v. Rajah Sri Krishna, VII Mad. H. C. Rep., 6 ; Ven- 
kappa Chettiv. Akku, VII Mad. H. C. Rep., 219. Compare 
William v. Owen, 5 Myl and Cr., 303; Ensworth v. 
Griffith, 5 Bro. P. C.,184). Verner v. Wenstanley, 2 Sell, 
and Lef. 393 ; Goodman v. Grierson, 2 B. & B., 279.) 

It is important to observe that the expression conditional Mortgage 
sale is in itself somewhat misleading, although it is tk)uaisai l e" 
frequently used in Indian Courts to denote a mortgage 
by kutkobala or bye-bil-ivufa. It is only a somewhat loose 
and inaccurate way of expressing the contract known 
by the term mortgage in the English law. (Alu Prasad v. 
Sukhan, I. L. R, III. All., 614.) 

The distinction between a mortgage and a conditional Question of 
sale properly so called, is, however, sometimes very nice, in'aii^sucii 
and it is not always easy to determine the class to which cases. 
a particular transaction belongs. The question is, was the 
transaction a bond fide sale with a contract for re-purchase, 
or was it a mortgage under the form of a sale ? In this, as 
in every other case, the intention of the parties must be 
looked to, and that intention may be shown by the deed 
itself, by other instruments, or even by oral evidence. 
(Alderson v. White, 2 DeG. and J., 97 ; see also Nallana 
Gaundan v. Palani Gaundan, II Mad. H. C. Rep., 422.) 
The real nature of the transaction must be carefully looked 
into; the mere form of the instrument not being con- 
clusive, and a deed will not necessarily be regarded as creat- 
ing a mortgage, although it may be described as such on 
the face of the document. Thus, where a deed, which on 
the face of it was described as a mortgage, stated that 
the grantee was already in possession under a previous 



198 LAW OF MORTGAGE. 

LECTTJBE mortgage by the grantor, and was, under the second deed, 
v< to receive the profits in liquidation of interest so far as 
they would go, and that the grantor was not to be liable 
to repay the principal money or such balance of interest 
(if any) as might accrue upon it, unless he adopted a son, 
and, unless that event happened, was to enjoy the property 
conveyed in right of purchase for the sum (principal and 
interest) due to him, it was held that the deed was a 
sale liable to be converted into a mortgage, and not a 
mortgage liable to be converted into a sale. (Subhabhat 
BinBahanbhat v. Vasuderbhat Bin Subhabhat, I. L. R., II 
Bom., 113.) 

Covennnt The Court distinguished the case from Howard v. Harris 
sue. ^j Vern, 190) on the ground that in the latter there was a 
covenant by the mortgagor upon which he might have been 
sued by the mortgagee. But there was no such absolute cove- 
nant in the case before the Court, as no debt whatever would 
have been due from the grantor until he adopted a son, and, the 
grantee, excepting in that event, would not have the usual 

Bnpuji v. remedies of a mortgagee. A similar construction was put 

Sena. on ano fc ner deed in Bapuji v. Sena Bharaji (I. L. R., II. 
Bom., 231). It appears from the report that the grantor in 
that case executed to the grantee a document reciting a 
mortgage by the former to the latter of certain lands for 
Us. 125, on which Rs. 200 were then due from the grantor 
to the grantee, and containing an agreement that the grantee 
should pay Rs. 75 to another creditor of the grantor, and 
purporting, in consideration of Rs. 275 so made up, abso- 
lutely to sell and convey the mortgaged lands to the grantee; 
and the grantee executed to the grantor a document of the 
same date, reciting the sale of the mortgaged lands by the 
grantor to the grantee for the consideration of Rs. 275, and 
covenanting that the grantee should re-convey to the grantor 
the lands (the subject of the grant), if the grantor should 
repay to the grantee the sum of Rs. 275 within a certain 
period, and providing that in case of default in such pay- 
ment within such period, the covenant for re-conveyance 
should become null. It was held that the transaction was 
a sale, and not a mortgage, and that consequently 
the grantor had no right to redeem the lands after the 
expiration of the period so fixed for the payment of 
Rs. 275 by the grantor to the grantee, there being no 
evidence or allegation that, at the date of the exe- 
cution of the two documents, Rs. 275 were an insufficient 



PERSONAL LIABILITY OF MORTGAGOR. 199 

consideration for the sale of the lands, nor any stipula- LECTURE 
tion that the grantee should account for the rents and 
profits received by him, or that the grantor should pay 
interest on the Rs. 275, nor anything to show that the 
grantor remained in possession after the execution of the 
two documents, or that subsequently to that time any 
advances were made by the grantee to the grantor on the 
security of thelands, nor anything in either documentwhich 
pointed to a right on the part of the grantee to recover 
from the grantor the sum of Rs. 275 or any part of it before, 
at or after the period named for the repurchase. (Bapuji 
Apaji v. Sena Bharaji Marvadi, I. L. R., II Bom., 231.) 

I must tell you that the test sometimes applied by Personal 
English Judges, viz., the existence or absence of a power |jf e m' 
to recover the sum named as the price for the re-pur- gagor. 
chase, cannot safely be applied in India, because, as 
you will presently see, there is, in general, no personal 
liability incurred by the mortgagor in a mortgage by 
conditional sale. There are, however, other circumstances 
which may furnish a key to the real character of the 
transaction. If, for instance, the conveyance is not fol- 
lowed by possession, or if there is a covenant for the 
payment of interest, the transaction will be regarded 
as a mortgage, while, if the purchaser is let into posses- 
sion as owner with no power to recover interest upon 
the purchase-money paid by him, the instrument will 
probably be regarded as an absolute sale with an option 
to the vendor to re-purchase. It is, no doubt, possible to 
suggest a case in which the creditor might agree to take 
the rents and profits in lieu of interest, the real nature 
of the transaction being disguised under the appearance 
of a sale with a clause for repurchase ; but even in such cases 
the adequacy or inadequacy of the sum mentioned in the 
instrument as the purchase-money would perhaps throw 
some light on the transaction. " The intention of the 
parties, as collected from the tenor of the deed, shows 
whether the Bye-bil-wufa be a sale with the reserve of an 
option of retractation within a limited time, or a mort- 
gage for the security of money lent. A stipulation for a 
short period must be considered to mark that a sale was 
in the contemplation of the parties ; a long term denotes 
a mortgage, or security for a loan, and such mortgages, in 
the form of conditional sales, are very common." (Busunt 
Ali v. Ramkomar, I Macnaghten's Sel. Rep., 77, note. 



200 LAW OF MORTGAGE. 

LECTURE Compare Lakshmi Chelia v. Srikriahna, VII Mad. H. C. 
V- Rep., 6, and Venkata v. Akku, VII Mad. H. C. Rep., 219, 
with Nallana Ganadan v. Palani, II Mad. H. C. Rep., 
420 ; Gurusamy v. Swamiudha, II Mad. H. C. Rep., 450 ; 
Ramsaran v. Amrita, .1. L. R., Ill All., 369, and Chida- 
mbara v. Manikya, I Mad. H. C. Rep., 63 ; see also Sital 
Persaud v. Lachmi, I. L. R., X Cal., 30 ; Bhajan v. Musli- 
tak, I. L. R., V All., 324; Bhup Kuar v. Muhammadi ; 
I. L. R., VI All., 37. Compare Badriprashad v. Dowlut, 
I. L. R., Ill All., 706, where a document was construed as 
an agreement to sell and not a mortgage. See also Juseem- 
uddeen v. Hwrosunderri, XIX Suth. W. R., 274, where the 
document was construed as creating a redeemable lease.) 

True rule The true rule seems to be that wherever a transaction, 
^ n ^ s inception, is intended as a security for money, whether 
this intention appears from the deed itself or from any 
other source, it isal ways considered asa mortgage, and there- 
fore redeemable, although there may be an express agree- 
ment that it shall not be redeemable, or that, if redeemable 
at all, the right of redemption shall be confined to a 
particular time or to a particular description of persons. 
( Goodman v. Grierson 2. B. and B., 279. ) 

The criteria by which it may be determined whetlier a 
conveyance was intended as an absolute sale with a condi- 
tion for repurchase, or, as a mere security, are thus formulat- 
ed by Mr. Butler : " If the money paid by the grantee was 
not a fair price for the absolute purchase of the estate 
conveyed to him ; if he was not let into the immediate 
possession of the estate ; if, instead of receiving the rents for 
his own benefit, he accounted for them to the grantor, and 
only retained the amount.of the interest; or, if the expense 
of preparing the deed of conveyance was borne by the 
grantor, each of these circumstances has been considered 
by the Courts as tending to prove that the conveyance was 
intended to be merely pignorititious." (Note No. 96, by 
Mr. Butler to his edition of Coke upon Littleton, 205 a., 
cited in Bapuji Apaji v. Senabharajt Marvadi, I. L. R., II 
Bom., 231.) The enumeration, however, I must warn you, 
is by no means exhaustive. I would only add that in 
doubtful cases the Court leans strongly to the construction 
most favourable to the person claiming the right to redeem, 
(Longet v. Scawen, 1 Ves. Sen., 402) (c). 

(c) As to the distinction between mortgages and mere lease?, see 
Lecture VII. There are also some cases which, BO to speak, lie 011 the 



RIGHTS OF THE MORTGAGEE. 201 

The contract of mortgage by conditional sale is a form LECTUBK 
of security known under various names throughout the v - 
country. The Dristibundhuk of Madras is in its nature Dr ^' 
essentially the same with our own conditional sale, the dhuk. 
debtor agreeing with his creditor to put him in posses- 
sion, on default, of the property pledged to him, as abso- 
lute owner. The Gahen Lahen of Bombay is also analo- 
gous to our conditional sale, and I propose to treat 
of these varieties of mortgages in the present lecture, as 
they all belong to that group of securities in which the 
ownership of the pledge is liable to be transferred from 
the debtor to his creditor. 

I intend, in the first place, to call your attention to the Rights of 
rights acquired by the mortgagee under a conditional sale, gt?re olt ~ 
although the mutual rights and duties of mortgagor and 
mortgagee are necessarily so interwoven with one another 
that I cannot discuss the rights of the mortgagee with- 
out in some measure touching upon those of the mort- 
gagor. 

Now, the first observation which I think it necessary No person - 
to make is, that in a conditional sale in Bengal, and per- "f '^ ** 
haps also in other parts of the country, the mortgagor mortgagor, 
does not ordinarily incur any personal liability. The cre- 
ditor can only look to the land pledged to him for the 
satisfaction of his debt. If the debtor makes default, he 
may, it is true, foreclose the equity of redemption and 
become the absolute owner of the estate ; but he cannot 
enforce payment from the debtor personally. If, therefore, 
the property is worth less than the amount due to him, 
he must suffer the loss, as a decree for foreclosure is the 
only remedy to which he is entitled. This was laid 
down in a very early " construction " by the Sudder 
Dewany Adalut of Calcutta, and the view of the law there 
taken, has not, so far as I am aware, been since question- 
ed. The "construction " says : "If the mortgage be of the 
nature of a conditional sale and the money be not repaid, 

border-land between simple mortgages and mortgages by conditional 
sale; for an instance, see Gfooknldus v. Jfriparam, (XIII Ben. L. Rep., 205, 
P. C.,) where a covenant that if the mortgagor fails to pay, he shall 
cause settlement to be made with the mortgagee, was construed not as 
a mortgage by conditional sale, but as a simple mortgage. I may add 
that the Privy Council also held iu this case that the rule that a 
Bye-bil-wufa does not become absolute upon breach of the condition as 
to payment without proceedings for foreclosure, obtains in the Central 
Provinces of India. 



202 



LAW OP MORTGAGE. 



LECTURE 
V. 



Personal 

liability 

not to be 

presumed 

without 

express 

covenant. 



the lender, unless good and sufficient cause be shown, can 
only sue for possession of the property pledged, and has 
not the election of suing for the money or to be put 
in possession of the property as he may deem most 
advantageous to his own interest." (Construction, 898, 5th 
September 1834; see also VII Macnaghten's Sel. Rep., 92. 
As to the circumstances under which an action for debt may 
be brought, see Khedoololl v. Rutton, V Macnaghten's Sel. 
Rep., 10 ; Bhugwan v. Govind, I. L. R., IX Cal., 234.) (d). 

The language of the ' construction ' is not perhaps very 
precise, and it would seem that the proposition that the 
mortgagee must ordinarily look to the land is somewhat 
broadly laid down. The question, I presume, must depend 

(rf) In the last mentioned case the mortgagee was allowed to recover 
the costs of certain abortive foreclosure proceedings. (Cf. Rasmoney v. 
lllahee, S. D. A. 1854, p. 573.) It is important to observe that a mort- 
gagee is entitled, according to the English law, not only to the costs 
incurred by him in perfecting his title or protecting it, but he may also 
recover any costs bond fide incurred by him for the purpose of realizing 
his security. Thus, if a sale by the mortgagee under his power becomes 
abortive otherwise than owing to the negligence or misconduct of the 
mortgagee, he will be entitled to add the costs of such sale to his secu- 
rity. (Farrer v. Lacy Hartland and Co., 25. Ch. D., 636.) I may here 
mention that the peculiar nature of the law which is administered by the 
English Court of Chancery is well illustrated by the case of ex-parte Fuinga 
in re Sneyd (25 Ch. D., 338), in which the Court held that an 
action of debt could not be maintained by the mortgagee against the 
mortgagor for costs and expenses properly incurred by the mortgagee in 
relation to the mortgaged property. " No doubt," observed Lord Justice 
Cotton, " if the debtor in his character of mortgagor, claimed to redeem 
the mortgage, the Court would not grant him that which originally 
was an indulgence a departure from the strict tenor of his legal right 
without imposing upon him the condition of paying the mortgagee 
not only the debt which he had contracted to pay by his covenant, but 
any expenses which had been properly incurred by the mortgagee in 
his position as such. But this is an entirely different thing from saying 
that an action of debt could be maintained by the mortgagee against 
the mortgagor for those expenses. It is said that the mortgagee's right 
in a redemption action, is founded on an implied contract by the 
mortgagor to pay these costs ; but I am of opinion there is no such 
contract, but as a condition of redemption that a Court of Equity 
imposes on the mortgagor the terms of paying all costs properly 
incurred by the mortgagee for the purpose of protecting the estate or 
himself as mortgagee." (25 Ch. D., 352.) It is however doubtful 
how far this distinction, which is based upon the peculiar nature of 
equitable jurisdiction in England, will be recognised by the Courts of this 
country. The mortgagor is not suffered to redeem except on payment of 
all costs incurred in protecting the estate, because he is liable as upon a 
quasi-contract to repay such moneys to the mortgagee ; but in that case 
there is no reason why the mortgagee should not be allowed to main- 
tain an action for such costs. You must, therefore, either refuse to allow 
such costs, whether the action is one for redemption or not, or you must 
allow the mortgagee the right to bring an action for them. 



DEFINITION OF CONDITIONAL SALE. 203 

upon the particular language of the instrument, and all LECTUBE 
that can be affirmed as a proposition of law is, that personal V. 
liability shall not be presumed in the absence of an express 
covenant. Thus qualified, the proposition would not seem 
to be open to any reasonable objection. Possibly this is 
all that was meant to be laid down in the construction, 
although the language used might have been somewhat more 
precise. I have in my own experience found very distinct 
covenants for repayment in Bengali mortgages by condi- 
tional sale, and it would not, I conceive, be just to say to 
the mortgagees in such cases, " You must not sue upon the 
covenant, but must proceed to foreclose the equity of re- 
demption." 

I find that Mr. Justice Macpherson in his treatise on construc- 
Mortgages defines a conditional sale as a mortgage ; in tio " f n>e 
which " the borrower, not making himself personally liable ^.wany 
for repayment of the loan, covenants that, on default of Adaiat. 
payment of principal and interest on a certain date, the 
land pledged shall pass to the mortgagee." (Macpherson's 
Mortgage, p. 15.) This definition, or rather description, 
of a conditional sale, is apparently taken from the judgment 
of the Court in a very early case in the Sudder Dewany 
Adaiat, and is, I should have thought but for the approval it 
has received both legislative and judicial, not altogether 
free from objection. 

In making the foregoing observations, I must not be 
understood as expressing an opinion that the mortgagee 
will be permitted in this country to pursue all his remedies 
concurrently, or that he may not be put to his election. 
The case of Mohanund Chatterjee v. Govind Nath Roy 
(VII Macnaghten's Sel. Rep., 110) is a direct authority 
that a mortgagee having elected to foreclose will not be 
suffered to sue the mortgagor personally for the debt 
secured by the mortgagee. 

The question, whether or not there is an implied implied 
warranty of title in a mortgage by conditional sale, ^i" by ty f 
is perhaps not wholly free from doubt. In the case of an mortgagor, 
out-and-out sale of immoveable property, there are con- 
flicting dicta, if not decisions, and the same uncertainty 
extends to the case of a mortgage. The weight of authority 
however, so far as mortgages are concerned, seems to be in 
favour of the existence of an implied warranty. (Dwarka 
Dass v. Rutton Singh, II Agra H. C. Rep., 119.) The ques- 
tion, however, is not of much practical importance, as there 



201 LAW OF MORTGAGE. 

LECTURE are few mortgages in which some expressions may not 
v> be found sufficient to constitute an express warranty of 
title (6). 

Remedy for The question next arises what is the remedy of 

warranty, the mortgagee if the title of the mortgagor turns out to 
be defective. This is pointed out by Mr. Justice Markby 
in delivering the judgment of the Court in Syud Sayet AH 
v. Syud Mohamed Jowad All (VII Suth., W. R, 197.) In 
that case the title of the mortgagor having proved defective, 
the mortgagee brought a suit, in which, after stating the re- 
sult of a certain action between the mortgagor and a third 
person, in which such third person was declared to be the 
owner of the property which had been mortgaged to the 
plaintiff, the plaint proceeded to state : " Hence, the right 
of Sayet Ali ceased to exist, and he held no longer any 
lien on the property sold. That, for this reason, your peti- 
tioner has become entitled to recover the consideration- 
money with interest accrued thereon." 

Sayet AJiv. The plaint was filed on the 20th February 1864 before 
^ Q time fixed for the repayment of the loan had expired. 
The defendant in his answer insisted that the suit was 
premature, as it was substantially a suit for the money 
which had been advanced, and which had not become due 
when the plaint was filed. Mr. Justice Markby, in over- 
ruling the objection, points out the real nature of the suit. 
The learned Judge observes : " With regard to the de- 
fence that the action is premature, because the time for 
repayment of the loan has not elapsed, we think that it is 
not well founded. The defendant has misunderstood the 
cause of action ; it is not brought to enforce repayment of 
the loan, but it is an action for damages for breach of 
contract. A warranty of title amounts to a contract by 
the seller that, in consideration of the buyer purchasing 
the property and paying the consideration money, he (the 
seller) will make good to the buyer any loss which the 
buyer ma}^ incur by reason of the seller not having a good 
title to the property. This is an absolute contract from 
the moment it has been entered into, and the buyer can sue 
upon it at once, if he can show that the seller has not a 
good title in accordance with his undertaking, and that he 
has sustained loss in consequence." Further on, the learn- 
ed Judge observes : "It is perhaps desirable to point out 

(e) The matter has now been set at rest, but not completely, by the 
Transfer of Property Act. 



REMEDY OF MORTGAGEE. 205 

that though, as above stated, the buyer may at once bring LECTURE 
an action on a warranty of title, if he can show a v - 
breach of that warranty, it does not follow, as a matter 
of course, that he is entitled to recover back as damages 
the whole of the consideration money. Nor do we nssent 
to an argument which has been put forward on the part 
of the plaintiff, and has received some countenance from 
the Principal Sudder Ameen, that, on its being ascertain- 
ed that the seller had no title, the conditional sale was (to 
use the expression of the judgment below) nullified" (/ ). 
We thus find that the mortgagee has a right to bring an Measure of 
action for damages if the title of the mortgagor is found damages ia 
to be bad. The remedy of the mortgagee is not quite En s |niul - 
so clear when the pledge is destroyed by what is called an 
act of God, or suffers deterioration so as to become insuffi- 
cient for the security of the creditor ; although in one case 
where a mortgagee was deprived by diluvion of the pos- 
session of lands over which he held an usufructuary lease, 
before he had repaid himself the amount advanced by him, 
it was suggested that the mortgagee had a right, unless 
the terms of the lease were very special, to call upon the 
lessor to pay him the balance of the loan which remained 
unpaid. (Sheo Golam Singh v. Roy Dinkar Dyal, XXI 
Suth. W E,., 226.) We have already seen that the Hindu 
law in such cases permitted the creditor either to demand 
another pledge or to sue the debtor immediately for the 
debt secured by the pledge. A similar right is given by 
the French Code Napoleon, and the principle may well be 
adopted by our own Courts as founded in justice and equity, 
and open to no reasonable objection (g). 

While upon the subject, I may venture t<> suggest that a Remedyfor 
similar rule may, perhaps, be applied with advantage to fij!^} 76 
cases in which the mortgagor's title is found to be defect- mortgagor, 
ive. It is perfectly true that the creditor would be suffi- 
ciently protected by permitting him to sue for damages 
for the breach of the warranty, but I think there would be 

(/) Compare Radha Chnrn v. Parbntty Churn (XXV Stith. W. E., 51), 
where a prior mortgage had been suppressed ; Pitambur v. Ram Saraii 
(XXV Suth. W. R., 7), where the mortgagee was deprived by the wrong- 
ful acts of the mortgagor of a portion of the mortgaged land ; and 
Smvaba v. Abaji (I. L. R., XI Bom., 475), where the mortgagee was evict- 
ed, and the security came to an end by the default of the mortgagor. 
See .also Lecture VII. 

(g) It has now been adopted by the Legislature, see Sec. 68 of the 
Transfer of Property Act. 



206 LA.W OF MORTGAGE. 

LECTURE very great difficulty in assessing the damages. As pointed 
v - out by the Court in Sayet AH v. Mohamed Jowad AH (VII 
Suth. W. R., 196), it does not follow that the mortgagee 
is entitled to recover as damages the whole of the "consi- 
deration money." For the purpose of this inquiry, I shall 
assume, as the Court apparently did in the case to which 
I have referred, that this would be one of those cases in 
which the mortgagor would be personally liable ; for, other- 
wise, there can be no doubt that the mortgagee would be at 
least entitled to recover as damages the whole of the money 
lent by him. The question then arises what, assuming that 
the mortgagor is liable to be sued upon his covenant, is to 
be the measure of damages for the breach of the warranty. 
Now, the principle on which the damages ought to be 
assessed would seem to depend upon the difference to the 
creditor in the risk incurred by him under the altered cir- 
cumstances ; and this difference ought to be the measure of 
the damage suffered by the creditor. Now, the difference in 
the risk is, I apprehend, capable of a money-valuation in 
this way. What would be the rate of interest which the 
creditor would demand if the money were advanced on the 
personal security of the debtor? And the difference between 
this hypothetical rate and the rate at which the money 
was actually lent, would represent the loss to the creditor, 
not indeed with mathematical certainty, but with that 
substantial accuracy which alone is attainable in such 
cases. It is, however, evident that the principle cannot be 
worked out satisfactorily in practice. The Court can, at 
the best, only make a rough estimate of the loss sustained 
by the creditor. There can, therefore, be no serious objec- 
tion to the extension to such cases of the rule that where 
by reason of an accident the mortgagee loses the benefit 
of the security, the mortgagor is bound either to repay 
the debt, or to give another pledge. The debtor surely 
cannot complain with reason of being obliged to repay, 
before the appointed time, money which would, in all 
probability, have been never lent to him but for his offer 
of a security which has turned out to be worthless ; 
while the creditor would be only too glad to call in his 
money (h). 

(A) It would seem that in England where a mortgage is made with 
covenant for title, the measure of damages in case of breach of the cove- 
nant is the original debt. (Per Patteson, J., in 4 Q. B., 3y5. cited in Mayue 
on Damages, p. 197. See also Lecture VII.) 



EQUITY OF REDEMPTION. 207 

In the foregoing observations, I have confined myself LECTTJBK 
to the rights acquired by the mortgagee immediately on v - 
the execution of the mortgage, and before any default has 
been committed by the mortgagor. In connection with ISi 
this subject I may mention that, although the mortgagor security is 
is treated as the owner of the land before foreclosure, the insufficient - 
mortgagee has the right, where the security is insufficient, 
to ask the Court to interfere to prevent waste by the 
mortgagor (King v. Smith, 2 Hare, 239). I have not, in- 
deed, been able to find any Indian case directly bearing 
upon the point ; but the rule is founded in good sense, and 
there can be no possible objection to its application in this 
country. 

I shall now proceed to discuss the rights of the mort- Failure to 
gagee after default made by the mortgagor to repay the 
debt by the appointed time. If we were to look only to time, 
the terms of the contract between the debtor and his credit- 
or, the ownership passes absolutely to the creditor imme- 
diately on default of payment ; and this would seem to have 
been actually the case in this country before the legislature 
interfered and engrafted on, what I may call, the common 
law of India, the rule borrowed from the practice of the 
English Court of Chancery, by which the mortgagee is per- 
mitted to redeem within a reasonable time, after he has 
forfeited his right to do so by the strict terms of his agree- 
ment. The preamble of Regulation XVII of 1806, which was Regulation 
passed for the Presidency of Bengal, points out the neces- ^g 1 of 
sity of " an equitable provision " for allowing a redemp- 
tion within a reasonable and limited period, as the only 
means of guarding against improvident and injurious trans- 
fers of landed property by the forfeiture of mortgages 
accompanied with a conditional sale. In the other pro- 
vinces, the legislature does not seem to have thought it 
necessary to interfere ; but the same result has been accom- 
plished by what is called, not perhaps very felicitously, 
judicial legislation. 

I propose in the first place to call your attention to the stipulated 
provisions of the Bengal Regulation, by which the mort- period, 
gagee was prevented for the first time from insisting upon a 
strict enforcement of the terms of his contract with the mort- 
gagor. The mortgagee, in order that he may become the 
absolute owner of the property pledged to him, must 
proceed to foreclose the right of redemption, and the pro- 
cedure which he has to adopt is pointed out by the eighth 



208 LAW OF MORTGAGE. 

LECTURE section of the Regulation, which says : " Whenever the 
Vt receiver or holder of a deed of mortgage and conditional 
sale, such as is described in the preamble and preceding 
sections of this Regulation, may be desirous of foreclosing 
the mortgage, and rendering the sale conclusive on the 
expiration of the stipulated period, or at any time subse- 
quent before the sum lent is repaid, he shall (after demand- 
ing payment from the borrower or his representative) apply 
for that purpose by a written petition, to be presented by 
himself or by one of the authorized vakils of the Court to 
the Judges of the zillah or city in which the mortgaged 
land or other property may be situated. The Judge, on 
receiving such written application, shall cause the mortga- 
gor or his legal representative to be furnished, as soon as 
possible, with a copy of it, and shall at the same time 
notify to him by a purwana under his seal and official 
signature, that, if he shall not redeem the property mortgag- 
ed in the manner provided for by the foregoing section 
within one year from the date of the notification, the 
mortgage will be finally foreclosed, and the conditional sale 
will become conclusive." 

Leading The preceding section declares the mortgagor entitled to 
this 8 oint rec ^ eem on payment of the principal sum with the interest 
due thereon. Now, the language of this section has given 
rise to a good deal of discussion ; and I cannot do better 
than call your attention to some of the questions which have 
arisen upon it from time to time. In the case of Shoroshee 
Bala Dabee v. Nund Lall Sein (XIII Suth. W. R., 364 ; 
V Ben. L. Rep., 389) a somewhat nice question arose 
as to the meaning of the words " stipulated period " which 
occur in the eighth section of the Regulation. The facts 
in that case were shortly these : On the 4th of September 
1863, Shoroshee Bala Dabee and her son Hemendro Nath 
Mookerjee executed a mortgage of certain landed property 
at Chittagong to one Gobind Chunder Sein. The deed 
was in the English form, and by it the property was 
conveyed to Gobind Chunder absolutely, subject to the 
proviso that in the event of the mortgagor's paying Gobind 
Chunder the principal sum of Rs. 54,437-10-4 on the 4th 
September 1868, and in the meantime paying interest on 
that sum at 10 per cent, per annum half-yearly, (i. e., on 
the 4th March and 4th September), with annual rests in 
the case of default of such payment, then and in such case 
Gobind would re-convey. 



STIPULATED PERIOD. 209 

The mortgagors failed to pay the whole of the interest LECTURE 
which became due under the terms of the mortgage, and 
on the 4th December 1866, Gobi ml Chunder applied by Shoro9h 
written petition to the Judge of Chittagong.for a foreclosure Baia 
of the mortgage pursuant to the provisions in that behalf Dabee ' 3 
of section 8 of Regulation XVII of 1806. Thereupon, the 
prescribed notification seems to have been made to the 
mortgagors by the Judge. 

.Upon the footing of this petition and notification, 
Nund Lall Sein, the son of Gobind Chunder, on the 15th 
April 1868 (his father having meanwhile died), instituted a 
suit for the establishment and confirmation of absolute 
purchase and to obtain possession of the mortgaged pro- 
perty accordingly. 

It is obvious from this statement of the facts of the 
case that the application to foreclose, as well as the suit 
based upon it, were instituted before the period fixed for 
the repayment of the loan secured by the mortgage had 
elapsed. It was contended for the plaintiff that the suit 
was not premature, as according to the terms of the deed, 
the defendants had lost their right to ask for a reconvey- 
ance ; and the Regulation was never intended to give a 
right to the mortgagor other than a right to redeem within 
a certain time, after he has lost all right to the property 
under the strict terms of the contract, and that the stipulat- 
ed time within the meaning of the Regulation had, there- 
fore, arrived as soon as there was a breach by the debtor. 
The contention, however, was overruled, and the Court 
in giving judgment observed : " If the Zillah Court was 
at liberty, and had the machinery to deal with this matter 
precisely upon the principles which govern the English 
Court of Chancery, the facts of the case are possibly such 
as would give the plaintiff a right of suit even before 
the expiration of the time agreed upon for repayment of 
the principal debt. For, whenever that has occurred by 
reason of which the mortgagor has lost his right under the 
deed to call for a reconveyance of the property, and he can 
only get back the mortgaged premises by virtue of the 
right of redemption which the Court of Equity still pre- 
serves to him, then also that Court allows the mortgagee to 
come in and insist that the mortgagor shall elect between the 
exercising of this right of redemption and being foreclosed. 
But we think that this mortgage- transaction, notwithstand- 
ing that it wears a completely English aspect, falls within 

B. B. G., M. 14 



210 LA.W OF MORTGAGE. 

LECTURE the operation of Regulation XVII of 1806. It is in all 
v> respects parallel with the mortgage common in this country, 
which is effected by means of a bill of absolute sale, toge- 
ther with a contemporaneous ekrar for reconveyance ; and 
mortgages of this sort have always been treated as being 
subject to the Regulation. The words ' conditional sale ' 
as explained by the preamble, are broad enough to cover 
them, and there is no doubt that they are especially within 
the mischief against which the enactment was directed, 
This being so, the mortgagee can only obtain a foreclosure 
by following the procedure which is laid down by section 
8 of the abovementioned Regulation. And although there 
is some ambiguity in the words of that section relative to 
the time when the mortgagee may first prefer his petition 
for foreclosure, this is cleared up by reference to the pre- 
vious section. The last clause of the 7th section runs 
thus : " The whole of the provisions contained in section 
2, Regulation I of 1798, and section 12, Regulation XXXIY 
of 1803, as applied therein to the stipulated period of 
redemption, are declared to be equally applicable to the 
extended period of one year granted for an equitable right 
of redemption by this Regulation." 

" This makes it evident that the year of grace, commenc- 
ing as it does with the notification which follows on the 
mortgagee's application for foreclosure, is intended by the 
Legislature to be additional to the period which is stipu- 
lated for redemption in the mortgage-contract ; and, there- 
fore, it follows that the application itself cannot be made 
before the expiration of that ' stipulated period.' 

" Now the stipulated period of redemption, referred to 
by the Legislature in this Regulation, appears to us to be 
the whole period prescribed by the mortgage-contract for 
the performance of the conditions, upon the fulfilment of 
which the mortgagor is to be entitled to a reconveyance. 
We do not think that it in any case means less than 
this, or depends upon whether the mortgagor duly performs 
all those conditions or not. We see no reason for suppos- 
ing that the Legislature by those words spoke, not of the 
period of redemption originally specified in the contract 
(as the words themselves certainly imply) ; but merely of 
the shorter period during which the mortgagor by perform- 
ance of the conditions may have preserved his strict right 
to redeem under the contract. 

" From the very object of the Regulation it is obvious 



STIPULATED PEFUOD. 211 

that the framers of it had expressly in view the case of LECTURE 
a mortgagor who fails to perform the conditions necessary v - 
to give him the contract-right to redeem, and if they 
thought of the ' stipulated period ' as a period terminating 
in the first default of the mortgagor, they would surely 
have used some apter expression than this to convey their 
meaning. 

" According, then, to our view, in the case before us the 
' stipulated period ' did not expire until the 4th September 
1868, and consequently both the presenting of the petition 
for foreclosure and the filing of this plaint occurred before 
the mortgagee had any right to take a single step towards 
foreclosing the mortgagor's equity of redemption. All the 
proceedings in this matter are, therefore, inoperative ; the 
suit is without legal foundation and must be dismissed." 
(Compare Imdad v. Munnu, I. L. R., Ill All., 509, and 
Buldeen v. Golab Koer, Agra H. C. Rep. (F. B.) 102. 

I shall presently ask you to contrast the case of Shoro- Forfeiture 
shee Bala with another case in which also a question arose f " r breach 
as to the meaning of the words " stipulated time." But ai 
before I do so, I wish just to make one observation. The 
Regulation seems to provide only for that class of mort- 
gages in Bengal in which a forfeiture takes place by reason 
of the " money advanced not being repaid within a stated 
period," and although it is perfectly true that a forfeiture 
for breach of any other condition is equally within the 
mischief of the Act, the statute does not in terms embrace 
such cases. 

According to the law as administered in the English 
Court of Chancery, and which is followed in those parts 
of the country in which Regulation XVII of 1806 is not 
in force, it seems that the mortgagee is entitled to sue at 
any time after default in payment of interest, where his 
right to do so is not qualified by a covenant not to call in 
the money during a certain period. (As to cases unaffected 
by the Regulations, see Spences' Equity, Vol. II, p. 675, 
and Prosaddas Dutt v. Ramdhone Mullick, I Ind. Jur., 
1886, p. 255.) 

As the law, however, stands at present in this Presi- 
dency, the mortgagee cannot call upon the mortgagor to 
elect between exercising his right of redemption and being 
foreclosed at any time before the period fixed for the repay- 
ment of the loan secured by the mortgage, whatever may 
be the nature of the covenants contained in the deed. 



212 LAW OF MORTGAGE. 

LECTURE The case of Omachurn Choivdhry v. Behary Lall MooJcer- 

Y - jee (XXI Suth. W. K, 274), however, shows that the object 

~ of the mortgagee may be indirectly accomplished by the 

chw-n v. fixing of an early date for the repayment of the money, 

Behary followed by a covenant that the money shall not be called 

_ ' in for a certain term if the interest is paid regularly, and 

the other covenants in the deed are observed by the 

mortgagor. The distinction may seem to be somewhat 

refined, but it seems to be the only way in which the rights 

of the parties can be reconciled with the provisions of the 

Bengal Regulation. 

In the case of Omachurn Chowdhry v. Behary Lall 
Mookerjee, the question arose upon a mortgage - deed in 
the English form by which the 3rd of January 1866 was 
fixed as the date for the repayment ofsilne loan. <This was, 
however, accompanied by a proviso that in the event of 
the debtor continuing to pay the interest on the principal 
sum regularly, the money should not be called in by the 
creditor before the 3rd of July 1871. The debtor having 
failed to pay the interest regularly, the mortgagee proceed- 
ed to foreclose under Regulation XVII of 1806 without 
waiting till the extended period mentioned in the proviso. 
It was contended for the mortgagor that the application 
was premature, as the 3rd of July 1871 was the " stipu- 
lated period " for the repayment of the loan within the 
meaning of the Regulation. The contention, however, 
was overruled, the Court observing that the last clause 
in the deed had not the effect of making the 3rd of 
July 1871 the stipulated period to which the Regulation 
would apply. Referring to the case of Shoroshee Bala, 
Chief Justice Couch, who gave the judgment of the 
Court, observed : " That is a different case from the pre- 
sent ; and the decision rather supports the view which we 
take in this case, namely, that we are to look at the time 
which is stipulated for the payment of the principal sum, 
and that the intention of the parties is to be collected 
from the whole of the deed. To my mind, in all these 
cases, it is a question of intention, what have the parties 
fixed upon as the time for payment ? " 

Question You will see that Sir Richard Couch says that the ques- 

one of in- tion is one of intention. This is no doubt perfectly true, 

lon ' and yet the language, if I may be permitted to say 

so, is somewhat misleading. In English mortgages a very 

early day is generally appointed for the repayment of 



FORECLOSURE. 213 

the loan; but it is seldom "intended" that the principal LECTURE 
is to be paid on the day named in the condition. Now, Vt 
suppose the question arose under the Regulation, whe- 
ther or not the day named in an English mortgage 
was that which the parties intended to be the stipulated 
time for repayment ; I suppose the question would be 
answered in the affirmative, although in a certain sense 
it might be said that the parties knew very well that 
the repayment of the loan would not be insisted upon on 
the very day mentioned in the deed. The fact is, the 
words " intended " and " intention " are somewhat ambi- 
guous, and, unless clearly explained, apt to be misleading, 
a reproach which they share with many other expressions 
familiarly used in the English law, and possessing the 
doubtful piHBHrii of being conveniently obscure. 

To return to the provisions of section 8 of Regulation Applica- 
XVII of 1806. We find that the application must be [^^ 
preceded by a demand for payment. And if proceedings for pay- 
are taken without a previous demand, they will be wholly meut * 
invalid. (Beharilal v. Benilal, I. L. R., Ill All., 408 ; 
Karan v. Mohan, I. L. R., V AIL, 9 ; Ganes v. Sada- 
nund, I. L. R., XII Cal., 138.) It is, however, not neces- 
sary that the demand should be for the specific sum which 
may be ultimately ascertained to be due. (Forbes v. Ame- 
runissa, X Moore. Ind. App., 340.) 

Again, the proceedings under the Regulation must be TLcmort- 
taken to foreclose the mortgage as a whole. In the case, be g for US 
for instance, of a mortgage in favour of two or more mort- closed as 
gagees, one of them cannot take proceedings to foreclose a w 
a portion of the mortgaged property for his share of the 
debt. (Bishan Dial v. Manni Ram, I. L. R., I All., 
297 (i). But see Indurjeet Koonwar v. Brij Bilas Lai, 
IHSuth.W. R., 130.) 

But there may be exceptional circumstances justifying 
a departure from the general rule that a mortgagor must 
not be harassed by a multiplicity of suits. Where 
the equity of redemption, for instance, in a part of the 
mortgaged premises becomes vested in the mortgagee, 
foreclosure proceedings may be taken in respect of the 
other portion for a proportionate part of the mortgage- 

(/) The English law is very similar; see Fisher's Mortgage, p. 477. 
The mortgagee may, however, apply for foreclosure as trustee for him- 
self as well as others, assignees for instance, beneficially interested in 
the mortgage-money (Rqjchiciidei- v. Alanorama, XII Suth. W. R., 353). 



214 



LAW OF MORTGAGE. 



LECTURE 
V- 



Case of 
joint mort- 



Court to 



must be 
made. 



Duty of 

receivin" 
nppiicatioi 



debt. (Blsheshur Singh v. Laik Singh, I. L. R., V All., 
257; Hunuman v. Kali, Suth. W. R, 1864, p. 285.) 
In cases governed by the Bengal Regulation, there arc, 
however, difficulties in the way of such a proceeding, 
^here being no machinery for ascertaining the several pro- 
portions in which the properties may be liable, the func- 
tions of the District Judge being, as we shall presently 
see, purely ministerial. Again, where there are several 
joint mortgagors, the mortgagee must proceed to foreclose 
all the mortgagors jointly, and it is not competent for the 
mortgagee to treat a sum paid by one of the mortgagors 
as made on his own account in respect of his rateable 
share of the joint debt, and to release his share from 
further liability, and then to foreclose the other mortga- 
gors for the balance of the mortgage^^Jjt Bi ^7icmcK/& 
Singh v. Pakkar Singh, I. L. R,, II AIL, 906.) With- 
out saying that there may not be cases of mortgages of 
separate shares in which, by proceedings properly framed, 
foreclosure may take place in respect of some of such shares 
only, it may be safely affirmed that ordinarily proceedings 
must be taken to foreclose a mortgage as a whole. (Noren- 
der Narain Singh v. Divarka Lai Munder, I. L. R., Ill 
Gal., 397; Chandika v. Pokkar, I. L. R., II AIL, 906; 
Bishendyal v. Munniran, I. L. R., I AIL, 297 ; Nilkant 
Banerji v. Sureah Chunder, I. L. R., XII CaL, 414 P. C. ; 
Bhora v. Abila, X Suth. W. R., 476 ; Pursotam V. Chiangi, 
I. L. R., IX AIL, 68. F. B.) (j). 

To return to the Regulation : The section then points out 
^ e Court to which the application should be made, and 
the only point which it is necessary to notice on this part 
o ] ie enactment is that where the properties are situated 
in two districts, the application may be made to either of 
the Judges within whose jurisdiction the property or a 
portion of it is situated. (Rashmonee Debea v. Prankis- 
sen Dass, IV Moore. Ind. App., 392 ; Surjan v. Jaga- 
nath I. L. R., II AIL, 313 ; Prasanna v. Haran, V CaL 
L. Rep., 599. 

The Statute next defines the duty of the Judge on re- 
ceiving the application, who is directed to cause the mort- 
. gagor or his legal representative to be furnished with a 
copy. Now the expression " legal representative " has 
given rise to a good deal of discussion. The earlier 
authorities were all reviewed in Gunga Gobind Mondul v. 

(j) See further ou the subject Lecture VI. 



LEGAL REPRESENTATIVE. 215 

Banee Madhub Ohose (XI Suth W. R., 548; III Ben. LECTUBE 
L. Rep., 172), in which the question was whether tlie pur- 
chaser of a portion of the mortgaged property was 
entitled to notice. Mr. Justice Markby, in de- 
livering the judgment of the Court, observed : " The 
question turns entirely on the construction to be given Jf p "re!en- 
to the words ' legal representative' in Regulation XVII tative. 
of 1806. In the first place, it is contended broadly 
that those words did not mean the legal representative 
of the mortgagor in respect of the particular pro- 
perty mortgaged, but universal legal representative, 
such as an heir; and there is, no doubt, some colour for 
this contention. These words are sometimes used in the 
latter sense, as for instance, in section 210 of the Code 
of Civil Procedure, and this is the idea which these 
words would at first sight rather suggest to my mind. 
But it appears to me to have been settled by long prac- 
tice and authority that they were not used in this Regu- 
lation in this sense. The late Sudder Court held that the 
purchaser at a sale in execution of civil process is entitled 
to notice, and that doctrine has, I believe, ever since 
been acquiesced in. Now, this completely negatives the 
construction contended for. An auction-purchaser, as 
he is called, is not the universal legal representative of 
the mortgagor ; he is only the assignee of a portion of his 
property. 

" It also appears to me to have been decided by a great Notice, 
preponderance of authority in this Court (although I ad- 
mit that the decisons are not alogether reconcileable), that a 
purchaser out-and-out of the mortgagor's interest, whether 
by public or private sale, and whether he be in posses- 
sion or not, must be served with notice, except where 
any alienation of the mortgagor's interest has been prohi- 
bited by contract between the mortgagor and mortga- 
gee. 'It is not necessary to go through the cases which 
are all collected in Macpherson on Mortgages, 5th edition, 
page 179. 

" Nor do I think that there is any ground for putting 
upon these decisions the restrictions which have been 
now contended for, namely, that they do not apply to cases 
where the whole of the property comprised in the mort- 
gage has not been sold by the mortgagor, or to cases 
where the mortgagee has no notice of the subsequent 
sale, both which peculiarities are said to be found in the 



21 & LAW OF MORTGAGE. 

LECTURB case now under consideration. I do not see that a pur- 
v - chaser out-and-out of a distinct and definite portion of 
the property is in a different position from a purchaser 
of the whole. And as to the question of consent, I see 
no Around whatever for introducing that consideration. 
If, as is now decided, the words ' legal representative ' 
include an assignee of the mortgaged property, it appears 
to me that they must include all such assignees, and that 
to make a distinction between assignments to which the 
mortgagee has or has not consented, would be an unwar- 
rantable addition to the provisions of the Legislature." 
(See Kishen Bullubh Mahta v. Messrs. Belasoo Coomar, 
III Suth. W. R., 230; Brojonath Dass v. Nobakishen Moo- 
kherjee, VI Suth. W. R., 230 ; Dirgaj Singh v. Debi Singh, 
I. L. R., I All., 499. Of. Rameswar Nath Singh v. Jugjeet 
Singh,!. L. R., XI Gal., 341.) 

Purchaser We thus find that a purchaser of a part of the mort- 
of part of gaged property is a legal representative equally with an 
icgaiVepre- assignee of the whole of the property. In the case of 
seutative. Mohun Lall Sukul v. Brojonath Kundu (X Moore. Ind. 
App., 1), the words were construed in a still more extend- 
ed sense. In that case the mortgagee, after an unsuc- 
cessful attempt to withdraw an attachment which had 
been taken out against the mortgaged property by a 
judgment-creditor of the mortgagor, applied to the Dis- 
trict Judge for foreclosure under Regulation XVII of 
1806. The notice of foreclosure was served only on the 
widow and heiress of the mortgagor, and not on the 
creditor by whom the property had been taken in 
execution. The property was subseqeutly sold under the 
attachment which had been unsuccessfully contested by 
the mortgngee, and the purchaser under the execution, 
as the assignee of the debtor's equity of redemption, 
brought a suit for possession against the mortagagee upon 
the ground that the mortgage - debt had been paid off 
from the rents and profits of the mortgaged property. 
The mortgagee in his defence relied upon the proceed- 
ings taken by him under the Regulation, and contend- 
ed that the equity of redemption had been foreclosed. 
The Privy Council, however, were of opinion, that there 
was no valid foreclosure as no notice had been served upon 
the attaching creditor ; Lord Justice Knight Bruce who 
delivered the judgment of their Lordships, observing that 
the mortgagee, when he filed his application for foreclosure, 



JUDGMENT-CREDITOR OF MORTGAGOR. 217 

not only had notice that the interest of the mortgagor LECTURE 
had been taken in execution, but was actually disput- 
ing the right of the creditor to put up that interest to 
sale. Under such circumstances his Lordship thought that 
the notice ought to have been served on the decree-holder, 
adding: "It was quite clear upon the authorities that if 
the sale had taken place before the application for foreclo- 
sure, such application could not have been effectual unless 
the purchaser had been served with it." (But see Soobhal 
Chunder Pal v. Nitai, I. L. R., VI Cal., 663 ; Radhey v. 
Bujah, I. L. R, III AIL, 413.) 

This reference to the peculiar circumstances of the case Attaching 
would seem at first sight to suggest that it was not decided i^ai 10 * * 
solely with reference to the meaning of the words "legal represent- 
representative " in the Regulation ; but this decision must atlve ' 
be read with another decision of their Lordships (Pattabhi- 
ramier v. Vencataroiv, VII Ben. L. Rep., 136, P. C.), in which 
it was held that in the absence of any express legislative 
enactment, the interest of the mortgagee becomes absolute 
according to the terms of the contract by the mere failure 
of the mortgagor to redeem. We are therefore bound to 
suppose that in the earlier case of Mohun Lall Sukul, the 
Privy Council considered that the words " legal repesenta- 
tive " were sufficiently wide to embrace an attaching 
creditor who, as we shall hereafter see, acquires a sort of 
statutory hypothecation by virtue of the attachment. It 
follows that a puisne mortgagee, whether by way of simple 
mortgage or conditional sale, is entitled to notice under 
the provisions of the Regulation. (Nuddiar Chand Chuc- 
kerbutty v. Roop Doss Banerjee, XXII Suth. W. R., 475.) 

The Regulation is silent as to the person on whom the Notice to 
notice of foreclosure is to he served when the person 
entitled to redeem is an infant. When a guardian hns 
been appointed by the Civil Court, or the estate has been 
taken charge of by the Court of Wards, there can be 110 
difficulty whatever service on the guardian heing a per- 
fectly good service. If, however, no guardian lias been 
appointed, it would seem that service on the person who 
would have a preferable claim to the guardianship of 
the minor would be deemed a good service. (Dabee 
Persaud v. Manu Khan, II All. H. C. Rep., 444. See also 
Rashmonee Debea v. Prankissen Doss, IV Moore. Intl. 
A pp., 292 ; VII Suth. W. R., 66, P. C.) The safest course, 
however, for the mortgagee would be to apply to the District 



218 



LAW OF MORTGAGE. 



Casef 
intestacy 



LECTUBE Court for the appointment of a guardian, who might be 
v - served with the notice of foreclosure. 

I" a case f intestacy the mortgagee must serve the 
heir-at-Liw of the mortgagor, and service upon the party 
in possession but without any valid title, would not, except, 
perhaps, under very peculiar circumstances, be deemed 
sufficient for the purpose of foreclosing the mortgage. 
(Kalikumar v. Prankishori, XXII Sutli. W. R., 168.) 
A literal compliance witli the directions of the law, how- 
ever, is not always essential. Thus, where it appeared 
that, although the notice was addressed to the mortgagor 
who was dead at the time it readied the hands of his 
heirs, the service was held sufficient to entitle the mort- 
gagee to foreclose the mortgage. It is important to 
observe that no fresh notice is required where the 
mortgagee allows an extension of time beyond the year of 
grace allowed by the Regulation, the action of the mort- 
gagee not amounting either to a renewal of the mortgage 
or to the substitution of another mortgage for the origi- 
nal pledge. (Brijo Mohun Sutputty v. Radha Mohun 
Ley, XX Suth. W. R., 176. See also Boijnath v. Mahes- 
^vari, I. L. R., XIV Cal., 451, and cases cited therein.) 

Where there are more mortgagors or legal representa- 
- tives of such mortgagors than one, the notice ought to be 
served on each of them. A more difficult question arises 
when the mortgage is executed by one of several co-shar- 
ers, a practice not uncommon in this country ; but under 
circumstances under which if the transaction had been an 
out-and-out sale, it would be binding upon all the co-par- 
ceners. Thus, for instance, suppose A, the managing mem- 
ber of a joint Hindu family, executes a mortgage of an 
estate belonging to the joint family, the other members 
assenting to the transaction, either according to the usual 
practice by subscribing their names as attesting witnesses, 
or otherwise ratifying the transaction. There is little 
doubt that in such cases, if the mortgagee is not aware of 
the rights of the other members, it would be sufficient if 
the notice is served on the person by whom the mortgage 
was executed. The difficulty arises only where the mort- 
gagee is aware of the fact that the mortgagor is not the 
sole owner. It would seem, although the authorities are 
not very clear or consistent on the point, that even in such 
eases there may be a valid foreclosure on the foundation of 
a notice served only on the person who appears to be the 



Case of 



gagor. 



NOTICE OF FORECLOSURE. 219 

mortgagor on the face of the instrument by which the LECTCBE 
charge is created. Ramgopal v. Rajldshore, S. D. A., 1849, 
p. 36 ; Bhoivannychurn, v. Gooroopersaud, S. D. A., 1850, 
p. 923. Of. Punchum v. Mungle, III Agra H. C. Rep., 207, 
and cases cited therein.) 

I may mention that persons deriving title subsequently Who are 
to the application of the mortgagee to foreclose are not 
entitled to any notice. If it were otherwise, proceedings 
in a foreclosure suit would be endless, as a fresh alienation 
might be made every day in the course of the proceedings. 
(The Bishop of Winchester v. Paine, 11 Vesey, 194; seo 
also Bhanumutty Chowdrain v. Prem Chand Neogee, XV 
Ben.L. Rep., 28. But see Sheogolam v Ramrup, XXIII Suth. 
W. R., 25, where, however, the assignment took place 
before the notice was actually served, and the mortgagee 
was cognizant of such assignment.) The rule, however, as 
I have already explained, does not apply to a purchaser 
under nn execution, whose purchase, although subsequent 
in date to the application for foreclosure, was made under 
an attachment executed before the application to foreclose 
by the mortgagee. (Anundmoyee Dassea v. Dhunindro 
Ghunder Mookerjee, XVI Suth. W. R, P. 0., 19 ; S. C., XIV 
Moore Ind. App., 111.) In such cases, however, it would 
seem that notice to the execution-creditor would be suffi- 
cient. 

Then, as to the nature of the service, it must, where 
practicable, be personal, and substituted service will not 
be good except where the mortgagor is shown to be keep- 
ing out of the way. In the case of Syud Esaf Ali 
Khan v. Mussamut Azumtoonessa (Suth. W. R., 1864, 
p. 49), Mr. Justice Norman, in delivering the judgment 
of the Court, said : " We may observe that, by the sec- 
tion now under consideration, the notification is not merely 
a preliminary proceeding leading up to a judgment of 
foreclosure to be subsequently pronounced in Court. It 
not only fixes the date from which the period during 
which the mortgagor is to retain the right to redeem 
is to be computed, but it is of itself the operative act 
in the foreclosure proceeding. We think, therefore, that 
the service of the notice must be evinced by the clearest 
proof, and must in all cases be, if not personal, at least 
such as to leave no doubt on the mind of the Court, that 
the notice itself must have reached the hands, or come to 
the knowledge of, the mortgagor." (Compare Norendro 



220 



LAW OF MOKTGAGE. 



LECTURE 



Provision 
of the Re- 

maudatory 
aud not di- 
rectory. 



View of 

ad^ 
Court. 



Narain Sing v. Dwarka Lai Munder, I. L. R., Ill Cal., 
397, P. C.) * 

You will observe that the Regulation directs that a 
copy of the application should be furnished to the mort- 
g a g or or ^ ls legal representative. This provision is man- 
datory and not merely directory, and an omission in this 
re spect will, it seems, vitiate the whole proceedings. In the 
case of Santi Ram Jana v. Modoo Mytee (XX Suth. W. R., 
363), where the mortgagor had not been served with a 
copy of the application, the Court observed : " It is urged, 
first, that the notice contained all the information which 
would be contained in the written application ; and, se- 
condly, that it was not the fault of the mortgagee, but of 
the Court peon, that the mortgagor was not furnished with 
a copy of the written application. But these are not con- 
siderations upon which we are at liberty to enter. The 
law prescribes two conditions which are to be fulfilled 
before a mortgage can be foreclosed, and we cannot say 
that the mortgagee before us, who has only fulfilled one of 
them, is in a position to foreclose. (See also Denonath Oan- 
gooly v. Nursing Pershad Dass, XXII Suth. W. R., 90; 
The Bank of Hindustan, &c. v. Shoroshibala Debi, I. L. R., 
II Cal., 311 ; Norendra Narain Sing v. Dtvarka Loll 
Munder, I. L. R., Ill Cal., 397 ; Madhoprosad v. Gaju- 
dhur, I. L. R., XI Cal., 111.) The benefit of these pro- 
visions, however, may be waived. (Saligram v. Behari, 
Suth. W. R., 1864, p. 36.) But the mere fact that the 
mortgagor has not insisted upon the insufficiency of the 
notification at the trial in the original Court cannot be 
regarded as a waiver of any objection which he may have 
to the notification. (Madhuprosad v. Gajudhor, I. L. R., 
XI Cal., 111.) 

The Allahabad High Court has carried the principle of a 
close adherence to the provisions of the Regulation some- 
what further, holding that a notice of foreclosure bearing 
the seal of the Court issuing it, but signed only by the 
Munsirim, and not by the Judge, is not a sufficient compli- 
ance with the law, and cannob be the foundation of a 
decree for foreclosure. (Seth Harlall v. Nanick Pall, III 
All. H. C. Rep., 176. See also Basdeo v. Matadin, I. L. R., 
IV All., 276.) In saying that this is carrying the doctrine 
further than the Calcutta High Court has done, I do not 
mean to suggest that the decision is not perfectly good 
law, although it may possibly work hardship in particular 



NOTICE OF FORECLOSURR. 221 

cases (/c). At any rate it is better to adhere closely to the LECTURE 
plain directions of a statute than to fritter it away by 
calling in the distinction between mandatory and direc- 
tory enactments, a distinction which, unless carefully fenced 
in, would introduce the greatest uncertainty into the 
law (I). 

An examination of the general question to which the 
discussion has conducted us would be beyond the range of 
these lectures. Those of you who wish to know more on the 
subject may consult among others the following English 
cases : Morgan v. Parry, 17 0. B., 334 ; Henderson v. The 
Royal British Bank, 7 E. and B., 356. Compare Bowman v. 
Blyth, 7 E. and B., 26 : and Friend v. Dennett, 4 C. B., 
N. S., 576. 

I may here mention that the notification to the mortgagor what the 
ought to tell him distinctly that if he does not redeem the notice 
mortgage within one year, the mortgage will be finally contain? 
foreclosed, and the conditional sale will become absolute. 
In one case, in which the notice, after stating that an appli- 
cation had been made for the purpose of foreclosing the 
mortgage, called upon the mortgagor to appear and state 
any objection which he might have to the proceeding, the 
Court held that there was no notification as directed by the 
law, and refused to make a decree for foreclosure. (Bheek- 
liun Khan v. Bhechun Khan, III All. H. C. Rep., 35.) 

To return once more to the Regulation : we find that Proceed- 
if everything is regularly done, the conditional sale becomes He 
absolute unless the mortgagor takes the proper steps for the merely 
purpose of protecting his right of redemption within one ^ llst 
year from the date of the " notification." I shall consider 
in the next lecture the steps which the mortgagor must 
take for that purpose. It is, however, necessary to state 
that these proceedings are no. judicial proceedings, and 
any question between the parties may be raised in a regular 
suit. (Forbes v. Amerunnessa, X Moore Ind. App., 340.) 

" It has been ruled by the Circular Order of the 22nd of Regular 
July 1813, No. 37, and has ever since been settled law, that 8Ult * 
the functions of the Judge under Regulation XVI of 1806, 

(&) These cases have since been followed by the Calcutta High Court ; 
see Doma Sahu v. Nathan, I. L. R., XIII Cal., 60. 

(Z) It is said by a learned writer, not perhaps with much exaggeration, 
that " where the mandate of a statute is called and regarded as direc- 
tory, the legislative enactment is neither strictly nor liberally construed, 
but simply disregarded altogether." (Sedgwick on Statutes, p. 368.) 



' ""' 



222 LAW OF MORTGAGE. 

LECTURE section 8, are purely ministerial, and that a mortgagee after 
v - having done all that this Regulation requires to be done 
in order to foreclose the mortgage and make the conditional 
sale absolute, must bring a regular suit to recover posses- 
sion if he is out of possession, or to obtain a declaration 
of his absolute title, if he is in possession. 

Forbes v. " In that suit the mortgagor may contest on any suffi- 
c ' ien t grounds the validity of the conditional sale, or the 
regularity of the proceedings taken under the Regulation 
in order to make it absolute. He may also allege, and 
prove if he can, that nothing is due, or that the deposit, 
if any, which he has made, is sufficient to cover what is 
due ; but the issue, in so far as the right of redemption is 
concerned, will be whether any thing at the end of the 
year of grace remained due to the mortgagee, and if so, 
whether the necessary deposit had been then made. If 
that is found against the mortgagor, the right of redemp- 
tion is gone." (Per Lord Kingsdown, delivering the judg- 
ment of the Judicial Committee in Forbes v. Ameer unnessa.} 

Title of the Although in one sense it may, therefore, be said that the 

mortgagee. ^^ Q Q f ^ e mor tgagee is not complete till he obtains a 
decree in a regular suit, it must not be understood that 
the decree creates any title in favour of the mortgagee. 
It only establishes, beyond all question, that as between 
the mortgagor and mortgagee, the ownership has passed 
absolutely from the former to the latter. The title of the 
mortgagee in reality dates from the end of the year within 
which the mortgagor is permitted to redeem, and it is for 
this reason that the mortgagee may maintain an action 
for mesne profits against the mortgagor for the period 
between the expiration of the year of grace and the actual 
recovery of the land. (Jeora, Khun Singh v. Hookum 
Singh, V Agra H. C. Rep., 358. See also Suroop Chunder 
Roy v. Mohender Chunder Roy, XXII Suth. W. R., 539 ; 
Lot/hussein v. Abdul, VIII Suth. W. R., 476; Khub 
Chand v. Liladhar, Agra, H. C. Rep., 1868, p. 103 ; 
Tawakkul v. Luchman, I. L. R., VI All., 344.) 

On the same principle it has been held that as the 
mortgagee becomes the owner of the property on the ex- 
piration of the year of grace, he is liable in an action for 
contribution in respect of a payment of revenue which 
falls due after the end of the ye&r of grace, and the mere 
fact that no regular suit has been brought by the mort- 
gagee is no defence to such an action. (Gungagobind 



DECREE FOR FORECLOSURE. 23 

Mundul v. Ashootosh Dhur, XXI Sutb. W. R., 255.) Simi- LECTCIIB 
laiiy the mortgagee of a leasehold property becomes liable v - 
for rent to the landlord after foreclosure, at any rate where 
he takes possession (Macnaghten v. JBhikaree, II Gal. L. 
Rep., 323. Cf. Kaleedasv. Butcher, S. D. A. 1856, p. 1019; 
Macnaghten v. Mewalall, III Cal. L. Rep., 285, but the law 
laid down in the last case is doubtful.) 

It does not, however, follow that the mortgagee will be Right to 
entitled to recover rents from the tenants of the mortgaged recover 
property in the absence of any notice to them. Iu 
Raisuddin Choivdhry v. Klwdu Nawaz Chowdhry (XII 
Cal. L. Rep., 479), it was held that a mortgagee who 
has foreclosed his mortgage, is not entitled to rent from 
a tenant of the property from the expiration of the 
year of grace, but that he is entitled to rent only from 
the date on which he perfected his title by bringing a 
regular suit ; and the tenant had notice of his having done 
so. The case perhaps was correctly decided ; but there 
are certain observations in the judgments of the learned 
Judges, which betray some misapprehension of the rights 
of a mortgagee after foreclosure, an expression which, 
although not very correctly applicable to proceedings under 
Regulation XVII of 1806, 1 am obliged to use for the sake 
of shortness. In giving judgment, Mr. Justice Field said : 
" According to a long course of decisions in this Court, 
it is well settled that the title of a mortgagee is not 
completed upon the expiry of the year of grace allowed by 
the Regulation, but that it is necessary for him to bring a 
regular suit and obtain a decree in order to confirm his 
title ;" and Chief Justice Garth observed : "It is clear that 
until he, that is, the mortgagee, had perfected his right to 
foreclosure by means of a suit, the mortgagor's interest was 
not at an end, and the mortgagee was not entitled to the rent. 
He would only be entitled to it from the time when he per- 
fected his title, from the time when the tenant had notice 
that he had done so." These observations are sufficiently 
answered by the judgment of the learned Judges of the 
Agra High Court in Geora Khun Sing v. Kukoom Sing, 
(V Agra H. C. Rep., 358), to which I have already referred. 

I have been at some pains to explain the real character 
of the proceedings under Regulation XVII of 1806, and 
the relation they bear to the regular suit which the Cir- 
cular Order enjoins, because I find there is some miscon- 
ception on the point, arising probably from the observation 



224 LAW OF MORTGAGE. 

LECTURE made by the Privy Council in the case of Forbes v. 
v - Amerunnessa (X Moore Ind. A pp., 340) that the " title of 
the mortgagee is not even then (when the mortgagee has 
failed to redeem within the year of grace) complete." The 
context shows that all that was meant by these words was 
that the title of the mortgagee, the functions of the 
District Judge being merely ministerial, might be im- 
peached by the mortgagor in a regular suit, notwithstand- 
ing the regularity of the proceedings under the Regulation, 
in other words, that the mortgagee's title was not as secure 
as under a decree for foreclosure. 

Nature of Before quitting the subject I wish to call your attention to 
ti^ns^m- " ^ ne P rec ise nature of the restrictions imposed by the Bengal 
posed by Regulation upon the strict rights given by the contract 
ticm {esula ~ ^ ^ ne m ortgagee. It has only extended the period of 
redemption to any time within one year from the date 
of the notification to the debtor that the creditor is 
desirous of enforcing the repayment of the debt, but any 
other covenants which may be contained in the deed are 
left wholly untouched. If, therefore, there is a covenant 
that the mortgagee shall enter upon possession on the de- 
fault of the mortgagor, he will not be restrained from taking 
possession, although he should attempt to do so before fore- 
closing the debtor's equity of redemption. He can, however, 
only take the rents and profits as mortgagee, liable to account 
to the mortgagor. The question whether a mortgagee in this 
country has a right to bring ejectment immediately upon 
Denonath default, was discussed in the case of Denonath Gangooly v. 
Ga,,gooi y ' s Nursing p ers had Dass (XXII Suth. W. R., 90), which de- 
serves very careful study. The question for the decision of 
the Court in that case was whether the mortgagee was en- 
titled to possession on the default of the mortgagor without 
foreclosure, the right to such possession being expressly 
stipulated for, and their Lordships, in giving judgment, 
observed : " The law has provided that if the mortgagee 
take possession, he is accountable to the mortgagor for the 
profits which he has received. The law has also provided 
that if the mortgagor desire to redeem the property, he 
may do so within the period specified in the Statute of 
Limitation, unless the mortgagee shall in the meantime have 
taken proceedings for foreclosure ; and the effect of those 
provisions is, no doubt, greatly to curtail the rights which 
the mortgagee has stipulated for. But one of the rights 
here expressly stipulated for is the right to possession, and 



FORECLOSURE. 225 

the law has nowhere provided that this right shall not be LECTURB 
exercised by the mortgagee. There is indeed a case in v - 
which it appears to be laid down that the mortgagee under 
a conditional sale has no right of possession until foreclo- 
sure (Sudder Dewany Adawlut Reports 1857, page 1818), 
but I cannot reconcile that with the two decisions of the 
Privy Council to which I have referred. (Anundmoyee 
v. Dharendro, XIV Moore Ind. App., 101 ; Brojonath v. 
Khelat, XIV Moore Ind. App., 144). In both these 
cases the property was situated in the mofussil, and it 
would, I think, be impossible to hold that the mortgagee 
of property in the mofussil under a mortgage in the 
English form had a right to the possession, and a mortgagee 
by conditional sale had not. In both cases the mortgagee 
by conditional sale had contracted for the possession 
at a certain date, and therefore if he be debarred from 
his right to possession, it must be by reason of the Regula- 
tions. But the Privy Council has given a construction to 
the Regulations which is that they do not debar the mort- 
gagee from taking possession if he has stipulated for it after 
default. But, on the contrary, on default the right of entry 
immediately accrues. It seems to me therefore that the 
first distinction relied on avails nothing, and that the plain- 
tiff under this deed of conditional sale had the same right 
of entry after default as the mortgagees had in the two 
cases decided by the Privy Council." 

I shall now ask you to compare the law of foreclosure in Foreclosure 
the Presidency of Bengal with that which obtains in other ^aTi'lT 
parts of India and which is based on the practice of the Bengal. 
English Court of Chancery. The mortgagee wishing to 
foreclose brings a suit, praying that an account may be 
taken of the principal and interest due on the security, and 
that the defendant may be directed to pay the same by a 
day to be appointed by the Court, or be foreclosed his 
equity of redemption. An account is then taken, and a 
decree is made for payment within a certain time, generally 
six months, the mortgage being foreclosed in the event of 
default, when the mortgagee may obtain an absolute order 
for foreclosing. Sometimes a sale is directed instead of 
foreclosure, but the practice is not general (m). We have 

(wi) It is said that suits for foreclosure are rare in Madras, although 
the right of the mortgagee to foreclose was fully recognized in Van- 
kata v. Tirumala (II Mad. H. C. Rep., 289). See Shephard and Browns' 
Transfer of Property Act, p. 113. 

R. B. G., M. 15 



226 LAW OF MORTGAGE. 

LECTURE seen that English Courts of Equity have been armed by a 

v - recent statute with extensive powers of directing a sale 

instead of a foreclosure, and it is to be hoped that the 

Indian Courts will follow the same practice. (But, see 

Sec. 67 of the Transfer of Property Act.) 

I may mention that a decree for foreclosure is not bind- 
ing upon one not a party to the decree. It is therefore 
necessary that all persons entitled to redeem should be 
represented in the suit. In England it has been held that 
a partner who is entitled to pre-emption is a necessary 
party to a suit for foreclosure. ( Redmeyre v. Foster, L. R., 2 
Eq., 467). But I am not aware of any Indian case which 
has gone to this extent. The decree, however, is binding on 
Whether a those who are actually parties to it. (Fisher's Mortgage, 680. 
S r ?u?su e e Radhabai v. Shamrav, I. L. R., VIII Bom., 168). The 
his reme- question whether a mortgagee is entitled to pursue all his 
currently reme( lies concurrently does not seem to have been directly 
raised in any case in this country. In England, where the 
mortgagee suspects his security to be deficient, the proper 
course for him would seem to be to proceed against the 
mortgagor on the collateral securities in the first instance, 
and then to apply for foreclosure for the deficiency. It is 
true that the mortgagee is at liberty to foreclose and then 
to proceed against the mortgagor on his collateral securi- 
ties, but this h;is the effect of opening the decree of fore- 
closure, and is therefore attended with inconvenience. It 
is difficult to say how the Indian Courts will deal with 
such cases. It is necessary to observe that, even in Eng- 
land, in special cases the mortgagee may be restrained from 
exercising all his remedies at once. (Barker v. Smart, 3 
Beav., 64; Lockhart v. Hardy, 9 Beav., 349), and if he deals 
with the mortgaged estate in such a manner that he can- 
not restore it on full payment, he will not be entitled to 
recover the mortgage money, as for instance, if he concurs 
with the purchaser of the equity of redemption in selling 
the estate and allows him to receive the purchase money. 
(Palmer v. Hendrie, 28 Beav., 341). In Bengal it would 
seem that the mortgagee, if he elects to foreclose, will 
not be suffered to proceed personally against the mort- 
gagor, even when there is a covenant for the repayment 
of the debt. There is no provision in the Regulations 
for re-opening a decree of foreclosure, and this of itself 
would be a ground for putting the mortgagee to his 
election. The same difficulty, however, does not occur where 



RIGHTS OF MORTGAGEE. 227 

the mortgagee applies for foreclosure for the deficiency LEOTUKE 
after having proceeded against the debtor personally. It v - 

is necessary to observe that a person having two mortgages 

cannot foreclose one of them and then sue upon the cove- 
nant in the other. A mortgagee cannot foreclose so as to 
vest the property absolutely in himself, without treating the 
whole of the debts secured on the property as satisfied ; and 
the effect of bringing a second suit would be to re-open the 
foreclosure decree in the first action. (Bapu v. Ramji, I. L. 
R., XI Bom., 112 ; Kali v. Kamini, I. L. R., IV Calc., 475, 
reversed on appeal but on a different point) (ri). 

As in Bengal, the mortgagee is entitled to enter upon night of 
possession on the default of the mortgagor, subject to his mort g a B ee 
own right to foreclose and the right of the mortgagor to re- stoiTimme- 
deem. There being, however, no distinction between Courts (1iatel y on 
of Equity and Courts of Common Law in this country, the 
law will not permit ejectment where the mortgagor would 
have a right to relief in equity. In the case of Sitaram 
Dandekar v. Ganesh Gokhle (VI Bom. H. C. Rep., 121), 
where the mortgage-deed contained a clause to the effect 
that the mortgagee should be entitled to possession on 
default by the mortgagor in payment of the interest on 
the principal money secured by the mortgage, the Court 
refused to make an absolute decree for ejectment, and 
directed the mortgagor to pay to the mortgagee the arrears 
of interest due to him within three months, or that in 
default the property should be delivered to the mortgagee 
to be held by him under the terms of the mortgage bond. 

It is necessary to observe that a mortgagee is ordinarily 
entitled to his costs, but the rule is not inflexible. The 
Court may refuse them where he is guilty of gross mis- 
conduct, as by refusing a proper tender or by fraudulently 
denying the title of the mortgagor to redeem ; but the 
mortgagee does not forfeit his right to costs by a bond fide 
claim to something which it afterwards turns out he is not 
strictly entitled to. (Dhondo v. Balkrishna, I. L. R., VIII 
Bora., 190). I will only add that in special cases, not only 
may the Court refuse the mortgagee his costs, but also fix 
him with the costs incurred by his improper conduct. 

I will conclude by discussing the question of the time Limitation. 

O) It is necessary to notice that the mortgagor is not allowed to im- 
peach a mortgage made by him, any more than the mortgagee can dis- 
pute the title of the mortgagor under whom he claims (Fisher's Mort- 
gage, p. 682). 



228 LA.W OF MORTGAGE. 

LECTUBE within which the mortgagee is permitted to assert his 
v> rights under the statute of limitations. It is necessary 
that the student should have some knowledge of the pre- 
vious state of the law on the subject a knowledge which 
will not, I think, be wholly useless even to the practitioner. 
I shall, therefore, in the first place, discuss the question 
with reference to Act XIV of 1859, and then with reference 
to the Acts which have succeeded it in the statute book. 

Act xxiv Now the provision of Act XIV of 1859, applicable to mort- 

of 1859. gages generally, was that laid down in clause 12 of the first 
section of the Act, which said : " To suits for the recovery 
of immoveable property, or of any interest in immoveable 
property, to which no other provision of this Act applies 
the period of twelve years from the time the cause of 
action arose." 

Cause of The words " cause of action " were nowhere defined 
* n ^ ie -^k' kut as Pi n ted out by Mr. Justice Markby 
in Denonath Gangooly v. Nursing Pershad Dass, it is 
clear that two things are necessary to constitute a cause 
of action ; a right to possession, and an adverse with- 
holding of that right. " If the plaintiff had not a 
right to immediate possession, or if having a right to 
possession, the defendants were holding with the plain- 
tiffs permission, and acknowledging his right, no suit 
could be brought in the one case, because the right to 
possession had not accrued ; and in the other, because it 
had not been disturbed or denied." (Per Markby, J., in 
delivering judgment in Dinonath Gangooly v. Nursingh 
Pershad Dass, XXII Suth. W. R, 90.) Now we have already 
seen that a right of entry may, in some cases, accrue imme- 
diately to the mortgagee on the default of themortgagor,but 
still no cause of action would arise if the mortgagor conti- 
nued in occupation acknowledging the title of the mort- 
gagee, and, as is not unfrequently the case, paying the 
interest on the principal sum to the mortgagee, who 
from various causes might be reluctant to assume posses- 
sion of the pledge. In such a case as this, it could not be 
seriously contended, that by allowing the mortgagor to re- 
tain possession for a period of twelve years, the mortgagee 
lost his right to the security. " It would be confounding 
adverse occupations with those which have not the sem- 
blance even of such a character, and would establish a 
bar arising from simple occupation and not from the 
laches of the demandant or others before him." (Per Lord 



POSSESSION OF THE MORTGAGOR. 229 

Kingsdown, VII Moore Ind. App., 353.) Similarly it was LECTUBK 
held that payment and acceptance of interest were evidence v - 
of the continuance of the relation created by the mortgage, - 
and until the mortgagor advanced any rights adverse to the' 
mortgagee his possession could only be regarded as permis- 
sive. (Manlcee v. Naunko, XIV Ben. L. Rep., 314.) 

A difficulty, however, arose in those cases in which the Pomsioi 
mortgagor neither paid any interest nor did anything else of the 
to indicate that he acknowledged the right of the mortga- * 
gee. In such cases it used to be presumed, in the ab- 
sence of any evidence to the contrary, that the possession 
of the mortgagor was only permissive, and could not, there- 
fore, be urged as a bar to an action by the mortgagee. 
If, however, the mortgagor retained possession under such 
circumstances as would rebut the presumption of a per- 
missive occupation, the mortgagee could not succeed. " A 
default may be made by the mortgagors, which may give 
the mortgagee a right to sue or to enter into possession (if 
he chooses to assert such right), but which may, notwith- 
standing, have no effect whatsoever in altering the nature 
of the mortgage title. So long as the mortgagor in posses- 
sion, or those who claim under him, assert merely a title to 
redeem, and advance no other title inconsistent with it, such 
possession must, primd facie at least, be treated as perfectly 
reconcileable with, and not adverse to, the title of the mort- 
gagee and the continuation of the lien on the property pledg- 
ed." (Buldeen v. Golab Koonwar, Agra Full Bench, 108.) 

It was thought at one time that no cause of action Mort- 
could accrue to the mortgagee before foreclosure, and as 



there was no limit as to the time within which an applica- action b- 
tion for foreclosure might be made under the Regulation, forefore- 
the curious result followed that a mortgagee might, if he ' 
chose to do so, enforce his security at any distance of time, 
and no safe title could possibly be acquired against a mort- 
gagee in this country. The doctrine rested on the supposi- 
tion, which I have shown to be erroneous, that no right of 
entry could accrue to the mortgagee till foreclosure. But if 
the deed was altogether silent as to the right to possession, 
or as sometimes happens, expressly said that possession 
should be taken only after foreclosure, the period would run 
only from the expiration of the year of grace. (See Modun 
Mohun Chowdhry v. Ashad Alii Beporee, I. L. R., X Calc., 
C8, and the cases there cited.) 

I shall next consider the case in which the rights of the 



230 LAW OF MORTGAGE. 

LECTURE mortgagor had been transferred to a third person. Now, if 
v - such third person purchased with notice of the mortgage, 
Eights of the same presumption would be made as to the character 
mortgagor o f his possession as if the mortgagor himself had been in 
toThir" 61 occupation. But if the purchase was made without any 
party- such notice, there could be no pretence for treating 
the possession of the purchaser as permissive, or as that 
of a person holding in privity of the mortgagor. In the 
case of Anund Moye Dassee v. Dhunindro Chunder 
Mookerjee (XIV Moore Ind. App., Ill), the Privy Council 
observed : " Their Lordships think that the title of a 
judgment-creditor, or a purchaser under a judgment decree, 
cannot be put on the same footing as the title of a mort- 
gagor or of a person claiming under a voluntary alienation 
from the mortgagor. They are of opinion that the posses- 
sion of a purchaser under such circumstances is really not 
the possession of a person holding in privity of the mort- 
gagor, or holding so as to be an acknowledgment of the 
continuance of the title of the mortgagee. The possession 
which the purchaser supposed he acquired was a posses- 
sion as owner. He thought he was acquiring the absolute 
title to the property, and that he was in possession as 
absolute owner." But this rule was not held applicable in 
a case in which there was no apparent change of ownership, 
and the mortgagor continued in ostensible possession, not- 
withstanding the sale of his rights. (Manly v. Patterson, 
I. L. K, VII Gale., 394). 

hoMu? Sser -^ h ave n k considered the case of a trespasser holding 
adversely adversely both to the mortgagor and mortgagee. Ifthetres- 
morra passer entered into possession after default, there could 
andmort- be no difficulty whatever, as that would be a much strong- 
gagee. er case than that of a purchaser without notice of the 
mortgage. A more difficult question arose, and the diffi- 
culty has not since been removed, when the occupation 
commenced before default, and the mortgagor took no steps 
for the purpose of vindicating his rights. There does not 
seem to be any method in this country by which the mort- 
gagee may interrupt the prescription, and it would seem to 
be a hardship upon him to hold that the time would begin 
to run before he could bring any action to enforce his rights. 
The authorities are not very clear on the point. In a case 
reported in the Weekly Reporter for 1864, Mr. Justice 
Jackson observed : " The question to be decided is, when 
did plaintiff's cause of action arise ? They have alleged 



PROCEDURE. 231 

that the date of expiry of their year of grace is the date LECTURE 
from which the cause of action should be calculated. This v - 
may be the rule in those cases where the mortgagor re- 
mains in peaceable and undisturbed possession of the estate 
mortgaged. But the rule no longer stands good when the 
mortgagor is dispossessed, and his title disputed, and another 
person obtains possession of the estate. The posses- 
sion of this new holder becomes a possession adverse to 
both the plaintiffs mortgagor and to the plaintiff, the 
mortgagee. If the mortgagee submits to this possession 
for more than twelve years, he loses his right to contest the 
title of the new holder. His cause of action against the 
new holder arose on the date on whicli the latter obtained 
such adverse possession of the mortgaged estate. Circum- 
stances may occur which will defer the mortgagee's cause 
of action. If the mortgagor, for instance, contests the title 
of the new holder, and a litigation ensues between them, 
the mortgagee is not bound to take action upon his mort- 
gage until that litigation is decided. But if the mortgagor's 
title is rejected, and his possession is disturbed by an 
adverse one, the mortgagee's cause of action against tlie 
new holder commences from the date on which the latter 
obtains possession on his title adverse to the mortgagor, 
which has been confirmed by the Courts. This is the law on 
the subject which has been laid down in the Privy Council." 
(Mamcoomar v. Prosunno, Suth. W. R., 1864, p. 375 ; 
Cf. Vittobhav. Gangaram, XII Bom. H. C. Rep., 180; Amu 
v. Rama, I. L. R., II Mad., 226.) 

We have seen how the mortgagee may protect himself 
in those systems of law in which he is allowed to bring 
an action with the object of interrupting the prescription, 
but such a proceeding is wholly unknown in this country. 

I may mention that section 6 of Act XIV of 1859 con- 
tained a special enactment with regard to suits on mort- 
gages in Courts established by Royal Charter. " In suits in 
the Courts established by Royal Charter by a mortgagee to 
recover from the mortgagor the possession of the immove- 
able property mortgaged, the cause of action shall be 
deemed to have arisen from the latest date at which any 
portion of principal money or interest was paid on account 
of such mortgage debt." 

It might perhaps be plausibly argued upon the language Section 6 of 
of this section, that in cases to which it did not apply, the ^ C 5 1 9 XI 
mortgagee's right of action would not be kept alive by the 



232 LAW OF MORTGAGE. 

LECTURE payment of any portion of the principal money or interest. 
This, however, does not necessarily follow. The object of 
the Legislature was probably only to put mortgages in the 
English form, when sued upon in the Supreme Court, on the 
same footing as English mortgages. If this be a correct 
view, it would seem that, under Act XIV of 1859, English 
mortgages were placed in a less favourable position as re- 
garded limitation than Mofussil mortgages, for, in the latter 
case, as we have already seen, the causs of action did not 
necessarily arise with the last payment of any portion of 
the principal or interest. 

Act ix of Act XIV of 1859 was replaced by Act IX of 1871, which 
1871 ' contained a distinct provision for suits for possession of 
immoveable property by mortgagees. The period allowed 
under the new law was the same as that under the old 
statute, but it ran not from the accrual of the cause of 
action, but from the time when the mortgagee first became 
entitled to possession. It was thought at one time that the 
old doctrine of adverse and permissive occupation had 
been abolished by the new Act, and that the mortgagee must 
sue within twelve years of the date fixed for the repa} T - 
ment of the loan. In the case of Loll Mohun Gungo- 
padhga v. Prosuno Chunder Banerjee (XXIV Suth. W. R, 
433) the Court observed : " The question raised in the 
earlier cases as to the accruing of the cause of action does 
not arise here, the legislature having in Article 135, Act IX 
of 1871, substituted for that occurrence a specific time, viz., 
the time when the mortgagee was first entitled to pos- 
session. This was confessedly the 29th Cheyt 1260." 

In this view of the case, the nature of the defendant's 
possession, whether adverse or permissive, is immaterial. 
The mortgagee having his time expressly limited by the 
Act was bound to guard himself, and if he did not do so, 
and allowed the time to pass, he loses his remedy. 
Brahmo- But a somewhat different view has been taken in sub- 
8 y c e a s?. as " sequent cases. In Ghinaram v. Ram (I. L. R., VI Calc., 
566, note) where the mortgage contained an express 
clause of entry on default of payment, the Court held 
that as the suit was brought within twelve years from 
the date on which the foreclosure proceedings became 
absolute, the plaintiff was not barred under Article 145 
of Act IX of 1871, as the plaintiff was suing not, as 
mortgagee but as owner, the Court observing that the fact 
of the mortgagee's taking foreclosure proceedings changed 



PROCEDURE. 233 

his interest as mortgagee to that of absolute owner, and LKCTUBK 
this judgment was followed in the case of Brahmomoye v - 
Dassi v. JDinnobundhoo Ghose (I. L. R., VI Calc., 564). It 
appears that in both the above cases proceedings were taken 
by the mortgagee within twelve years from the date of 
default, and it was not therefore necessary for the Court 
to consider the question whether Article 135 had the effect 
of obliging the mortgagee to take proceedings within a 
particular period to foreclose his mortgage. It would, 
however, seem that the provisions of the Limitation Act 
are not applicable to foreclosure proceedings taken under 
Regulation XVII of 1806, such proceedings not being 
suits within the meaning of the statute of Limitations and 
there being no special provision in the Act regarding such 
proceedings, Article 179 being applicable only to appli- 
cations ejusdem generis with those mentioned in the Act. 
It is, perhaps, doubtful whether the distinction upon 
which the Court proceeded in the above cases was present 
to the mind of the Legislature. However that may be, 
it would seem to be supported by the judgment of the 
Court of Appeal in Pugh v. Heath, (7 App 235). (See 
also Wrixon v. Vize, 3 D. & W., 117 ; Harlock v. 
Ashberry (19 Ch. D., 539. Cf. Purmanond v. Jamabai, 
I. L. R., X Bom., 49 ; Shurnomoyee v. Srinath Das, I. L. R., 
XII Calc., 614). 

In Muddun Mohan v. Ashad (I. L. R., X Calc., 68,) it 
was pointed out that where there is no express stipulation 
for possession on default, the mortgagee would be entitled 
to a right of action only after foreclosure, and a distinc- 
tion was made between mortgages containing an express 
stipulation for possession and those in which there is no such 
covenant, but it is doubtful how far this distinction rests 
upon sound principle. A somewhat difficult question arose 
under Act IX of 1871 in cases unaffected by the Bengal 
Regulation where the English procedure was followed. 
The Articles which dealt with mortgages were 132, 1 35 
and 149, the last Article relating to mortgages put in 
suit in Courts established by Royal Charters. A suit for 
foreclosure, it was said, could not correctly be described as 
a suit for possession by a mortgagee, although no doubt 
it may lead to possession ; while to describe it as a suit 
for money charged upon land would also not be a very 
accurate description. The introduction again of Article 
147 in the present Act would lead to the inference that 



234 LAW OF MORTGAGE. 

LECTURE suits for foreclosure had not been provided for in the earlier 
v - Acts, but these difficulties were got over in the same 
way in which they were met in England where it was 
held, although not without some conflict of opinion, that 
a suit for foreclosure fairly came as well under section 
40 of Stat. 3 and 4, William IV, Ch. 27 corresponding 
to Article 132 as under section 24 of the same Act, which 
corresponded to Articles 135 and 149 of Act IX of 1871. (See 
Dearman v. Wyche, 9 Sim., 570; Duvigier v. Lee., 2 
Hare, 326 ; Wrixon v. Vize, 5 Ir. Eq., R. 173 ; Ganpat v. 
Adarji, 1. L. R., Ill Born., 312.) 

Act XV of These difficulties have been removed to a certain extent 
1877. by- the new Act, but other difficulties are likely to arise in 
dealing with suits by mortgagees after foreclosure under Re- 
gulation XVII of 1806. Article 147 of the present Act would 
seem to point to cases in which the English procedure is 
followed, and probably in Bengal a suit by the mortgagee 
after foreclosure for possession would be regarded as com- 
ing either under Art. 144 or Art. 135. (Sharnomoye v. 
Srinath Das, I. L. R., XII Gale., 614.) (o) Article 146 is 

(0) The present as well as the past state of the law is thus summa- 
rised by Pigot, J., in Shurnomoyee v. Srinath Das (I. L. E.,XIICalc., 
614; cf. 619-620): 'From these decisions (Khelat Chunder v. Tara- 
churn, VI Suth. W. R., 270 ; S, C. on appeal XIV Moore. Ind. App. 150 ; 
Dinonath v. Nursing Prosad, XIV Ben. L. Rep., 87 ; Manltee Koer v. 
Munnoo, XIV Ben. L. Rep., 315) it would appear that under Act XIV of 
1859, a mortgagee was ordinarily bound to bring his suit within twelve 
years from the date of default, and was barred unless it could be shown 
(or might properly be inferred), that the mortgagor or the person in 
possession held by permission of the mortgagee after the date of default. 

In Act IX of 1871, Art. 135, it was declared that a suit instituted by 
a mortgagee for possession of immoveable property mortgaged must be 
brought within twelve years from the time when the mortgagee was 
first entitled to possession. And in the case of Lai Mohan Gango- 
padhya v. Prosunno Chunder Banerjee, (XXIV Suth. W. R., 315), it was 
decided that whether the possession of the mortgagor was permissive or 
adverse was immaterial, and that the mortgagee having failed to bring 
his suit within twelve years from the date of default, lost his remedy. 

This seems to have been the received opinion with one exception, 
namely, the exception referred to in Ghonaram Dobey, v. Ram MonoratJi 
Ram Dobey (VII C. L. R., 580.) and in Burmamoyee Dasi v. Denobwndhoo 
Ghose (I. L. R., VI Calc., 564 ; VII C. L. R., 583,) in which it was held that 
if the mortgagee could complete the foreclosure proceedings in a Dis- 
trict Court within twelve years from the date of default, he then became 
absolute owner of the property, and the foreclosure proceedings gave 
him a new period of limitation. 

A distinction between the decision in this case and the other cases 
already referred has been pointed out in Modun Mohuii Chowdry v. 
Askad Ali Bcpari (I. L. R,, X Calc., 68 ; XIII C. L. R., 53). 

After the repeal of Act IX of 1871, the present law, Act XV of 1877, 
was enacted. In it a new clause ia inserted, namely, clause 147, by 



PROCEDURE. 



235 



the correlative of Article 135, the one applying to Courts LECTUBE 
established by Royal Charters and the other to Courts not v - 

established by such charters. Notwithstanding, however, 

the improvements in the present Act, the omission in 
the third column of Article 14-6 has not been supplied. It 
contains a defective statement, but there can be very little 
doubt that it would apply to cases in which neither prin- 
cipal nor interest has been paid, the period of limitation in 
such case running from the date of default. An alteration 
has also been made by the present Act in Article 135 of Act 
IX of 1871 intended to meet those cases in which the parties 
agree to go on upon the footing of the mortgage after the 
mortgage term has expired. There is another slight altera- 
tion. The receipt by a mortgagee in possession of the pro- 
duce of the land is, under section 20, to be deemed a payment 
for the purpose of that section, but it is somewhat doubtful 
whether this provision is qualified by the proviso contained 
in the section. Under Act IX of 1871 it was held that 
where the mortgagor continued in possession under a dis- 
tinct agreement as tenant, the rent paid by him could not 
be regarded as a payment to save limitation. (Ummer v. 
Abdul, I. L. R., II Mad., 165). The Act has also supplied 
another omission. An acknowledgment by one of several 
mortgagees does not aftect the others. The difficulties which 



o o 



which a suit by a mortgagee for foreclosure or sale can be brought 
within sixty years from the time when the money secured by the mort- 
gage becomes due. But as we have already said, no suit for foreclosure 
could ever be brought in the mofussil. This was prohibited by the 
nature of the agreement, and by the terms to which we shall refer later 
on of Regulation XVII of 1806. Under the contract a mortgagee was 
originally the absolute owner from the date of default. But by Regu- 
lation XVII of 1806 it was a condition precedent to his becoming an 
absolute owner, that foreclosure proceedings should be taken in the 
District Judge's Office. 

When this has been done, a mortgagee having become absolute owner 
by virtue of the contract sues, not for foreclosure but for possession as 
owner of the property. It appears, therefore, impossible to hold that 
cl. 147 of the Limitation Act would apply to any mortgage by condi- 
tional sale executed between Hindus, and in respect of properties 
situated in the mofussil. If that be so, the law of limitation for a con- 
ditional sale would be that given in cl. 135, corresponding to cl. 132 of 
Act IX of 1871, namely, twelve years from the time when the mort- 
gagor's right to possession determined on the date of default, namely, 
February 1866, and the suit for possession would be barred on the 
17th February 1878. Does it make any difference, under Act IX of 
1871, what the possession was? The suit is barred against the mort- 
gagor himself or any body else. See Lai MoJiun Gangopadhya v. Pro- 
fmnno Chunder Banerjce (XXIV Suth. W. R., 433) and Modnn MoTinn 
Chowdry v. Ashad All Bepari (I. L. R., X Gale., 68 ; XIII C. L. R., 53.)" 



236 LAW OF MORTGAGE. 

LECTUKE have been felt in England in respect of arrears of interest 
V. and the distinction between a suit for redemption and a 
suit for foreclosure or an action on the covenant are not 
likely to arise in India. There is no provision in the Limi- 
tation Act corresponding to section 42 of Stat. 3 and 4, 
William IV, Ch. 27, and, as we have already seen, notwith- 
standing Arjbicle 63 of the Limitation Act, if the interest 
is a charge upon land, the same period of limitation is 
applicable to the recovery of the interest as to the recovery 
of the principal. (Baldeo v. Gokal, I. L. R., I All., 603 ; 
Ganpat v. Adarji, I. L. R., Ill Bom., 312 ; Davani v. 
Ratna, I. L. R., VI Mad., 417. For the previous state of the 
law, see Vithal v. Daud, VI Bom. H. G. Rep., 90, A. C. J.) 



(j>~) See further on the subject of limitation, Appendix 2, tit. Statutes. 



LECTURE VI. 



Equity of redemption Origin of expression Position of mortgagor before 
foreclosure Right, to redeem Bengal Regulation XVII of 1806 Recognized 
by Courts of Justices in other Provinces Opinion of the Privy Council 
Puttaveramier v. Vencatta Row Naiker " Once a mortgage always a mort- 
gage" Meaning of maxim Persons entitled to redeem Regulation XVII 
of 1806 Practice of English Courts of Chancery Mortgage security indivi- 
sible Effect of mortgagee's purchasing portion of mortgaged property 
Contribution Redemption under Bengal Regulations Deposit or tender 
What is a good deposit Rukea Begum v. Frannath Roy Chowdry Time with- 
in which deposit must be made Practice in Bombay and Madras Limitation 
Acknowledgment Effect of acknowledgment by one of several mortgagees 
Difference between English Statute and Indian Act. 

I NOW propose to call your attention to the position Position of 
of the mortgagor before the mortgage is finally foreclosed, mort 8 a s r - 
and the ownership of the pledge transferred from the 
debtor to the creditor. I have already pointed out that 
the mutual rights and obligations of the parties to a 
mortgage transaction are so closely interwoven with one 
another, that it is difficult to discuss the rights of the one 
apart from those of the other. There are, however, some 
points which will be more conveniently dealt with in the 
present lecture, and it is to these points that I wish to 
confine myself. 

The interest which resides in the mortgagor before fore- Equity of 
closure is known in this country by an expression borrow- redemption, 
ed from the English law an expression which is open, 
perhaps, to more serious objection than many others which 
we have borrowed from the same source. The interest of 
the mortgagor is known as the equity of redemption, or, 
as it is sometimes called, the right of redemption. Now 
even the expression " right of redemption " is not wholly 
unexceptionable. It suggests the idea, in common with 
the kindred expression " equity of redemption," that the 
interest of the mortgagor is a bare right : something 
essentially different from what we call ownership, which 
is supposed to be vested in some other person who, in this 
case, must necessarily be the mortgagee. It would, however, 
be more correct to say, that the ownership resides in the 
mortgagor notwithstanding the mortgage, the mortgagee 



238 LAW OF MORTGAGE. 

LECTURE acquiring by the contract only the right to foreclose. If we, 
YI - however, examine the history of the English law of mort- 
Origin of g a g e > we sna ll find that the expression " equity of redemp- 
expression. tion " first made its appearance at a time when the mort- 
gagor was supposed to have parted with the estate, retain- 
ing only the right of redemption or repurchase a right, 
which being under the peculiar protection of equity, 
came to be known as the equity of redemption. The 
expression originally served to distinguish the interest of 
the mortgagor from the " estate " which was supposed to 
pass to the mortgagee. In time, however, this right came to 
be regarded as an estate by the Courts of Chancery possess- 
ing all the incidents of an equitable estate in land. The 
original expression, however, was retained to denote the 
interest which remained in the mortgagor, although the 
nature of that interest had been greatly modified by the 
action of the English Courts of Equity. The expression 
" equity of redemption " is, therefore, an expression pecu- 
liar to the English law, and although its introduction into 
India may be regretted, it would be idle to protest against 
it at this time of day. I do not wish to be hypercritical, 
and I have been induced to make the foregoing observa- 
tions, simply because I know of instances in which the 
whole discussion has been materially coloured by notions, 
which would scarcely have suggested themselves to any 
body if the argument had not been conducted in the tech- 
nical language of the English law (a.) 

() The observations of Lord Blackburn, in Jennings v. Jordan, on the 
doctrine of consolidation of securities, deserve very careful attention. 
' Some of the rules acted on in the Courts of Equity, in the kindred sub- 
ject of taking securities on the same property, says the learned Judge, 
are founded upon this, that a mortgage, after the time specified for 
redemption had expired, was an absolute estate, which no doubt it was 
at law, and that the equity of redemption was only a personal equity to 
take away the legal estate from him in whom it was vested, which 
perhaps it originally was. It would seem that now after for a very long 
time equitable estates have been treated and dealt with as to all other 
intents estates, any rules founded on the antiquated law ought to be no 
longer applicable, and that Ccssante rationc cessare debet et lex ; but some 
rules apparently founded on this antiquated law have been so uniformly 
and long acted upon, that they must be treated as still binding." In 
the same case Lord Watson said : " The principles of equity as settled in 
the law of England are generally such as commend themselves at once, 
even to minds unfamiliar with that law ; but I must confess that in the 
present case I have been unable to apprehend or appreciate the equitable 
considerations upon which the doctrine of consolidation of mortgages, 
as now established, must be supposed to rest. The doctrine appears to 
me to have its root in equity. If A has separately mortgaged two estates 



BIGHT OF ALIENATION. 239 

The position of the mortgagor in possession has given LECTUBB 
rise in England to a good deal of, not altogether profitable, VL 
discussion, which, however, cannot find any place in our Po ~^~ of 
law. The mortgagor does not part with the ownership mortgagor 
of the property by pledging it to his creditor by way of S^ "" 
conditional sale, and his position before foreclosure does 
not differ in any material feature from that of the mort- 
gagor in a simple mortgage. It has been sometimes said 
that the position of the mortgagor in possession is 
that of a trustee. He is not the absolute owner of the 
land, but holds it subject to the rights of the mortgagee. 
This proposition, however, must be received with consider- 
able reserve. It is true that the indeBnite power of dealing 
with a property which we call ownership is in some respects 
controlled by a mortgage, but it is certainly not an accurate 
use of language to say that the mortgagor becomes a 
trustee for the mortgagee. 

From what I have already said, it must be clear to you Right of 
that, as in the case of a simple mortgage, the mortgagor is a ' ienation 

... . ..I ..i -1?, of mort- 

competent to alienate the property notwithstanding the gagee. 
mortgage, although he cannot, for obvious reasons, pass 
any greater interest than he himself possesses. The 
assignee must take subject to the rights of the mortgagee, 
who, in the event of a foreclosure, acquires the property 
free of all subsequent incumbrances. The mortgagor may 
either transfer the property absolutely, or create a second 
mortgage, subject, however, to the same limitation. It is 
hardly necessary to add that the interest of the mortgagor 
may be taken in execution, although any sale by the creditor 
must necessarily be subject to the charge created in favor of 
the mortgagee. In short, the mortgagor is competent to deal 
with the property in any way he likes, so that the rights 
of the mortgagee are not defeated or impaired. I may add 
that the mortgagor in possession is never liable to account 
for the rents and profits received by him. This is the law 
in England, and it also seems to be the law in this country. 
(The Malabar Company v.Dayaram, Bom. P. J., 1875, 191). 
The mortgagor, however, while in possession, must not do 

to B. it seems to be just and reasonable that a Court of Equity should 
decline to aid A in redeeming one of these estates, except upon condition 
of his paying to B the other mortgage debt, which might be insufficiently 
secured. But the equitable character of the considerations which have 
led to the growth and the development of the doctrine, as against pur- 
chasers of the mortgagor's equity of redemption, is by no means so appa- 
rent." (Jennings v. Jordan, 6 App. Cas. 698, of. p. 720-721.) 



240 LAW OF MORTGAGE. 

LECTURE anything to impair the security of the mortgagee, and, as 
VJ - I have already said, there can be very little doubt that he 
will be restrained from committing wilful waste, if the 
security is insufficient, or likely to be so rendered by such 
acts. (See s, 66 of the Transfer of Property Act). The 
mortgagor may, again, be liable in damages, for the 
breach, for instance, of a covenant to repair the mortgaged 
premises contained in the mortgage deed for the protection 
of the mortgagee's security. (Sha Shivlal v. Sha JRamdas, 
Bom. P. J., 1880, 246). 

Regulation \Ve have already seen that, notwithstanding the mutual 
1806. agreement of the parties, the ownership does not pass from 
the mortgagor to the mortgagee immediately on default 
of payment. The mortgagor, notwithstanding the default, 
continues to be the owner, or, to use the language of the 
English law, retains an equity of redemption which may 
be successfully asserted against the mortgagee. I told you 
in the last Lecture that this right was created for the first 
time in Bengal by Regulation XVII of 1806. No such 
provision was to be found in the statute law relating to the 
other Presidencies, but the doctrine of the English Court 
of Chancery, that the time stipulated in a mortgage is not 
of the essence of the contract, has been introduced into 
those provinces by the Courts of Justice as a rule founded 
Opinion of j n equity and good conscience." In the case of Putta- 
veramier v. Vencatta Row Naiker, however, the Lords of 
the Privy Council observed, that, in the absence of any 
known rule of law, a Court of Justice is not at liberty to 
qualify the rights and obligations of the parties as defined 
by their mutual contract. " What is known in the law of 
England as ' the equity of redemption ' depends on the 
doctrine established by Courts of Equity, that the time 
stipulated in the mortgage deed is not of the essence of 
the contract. Such a doctrine was unknown to the ancient 
law of India ; and if it could have been introduced by the 
decisions of the Courts of the East Indian Company, their 
Lordships can find no such course of decision." (Per Colvile, 
Sir James ; XIII Moore. Ind. App., 560 ; VII Ben. L. Rep., 
136 ; XV Suth. W. R., P. G, 37). Their Lordships, however, 
concluded by observing, " It must not then be supposed 
that, in allowing this appeal, their Lordships design to dis- 
turb any rule of property established by judicial decisions so 
as to form part of the law of the forum, wherever such may 
prevail, or to affect any title founded thereon." Since this 



RIGHT OF ALIENATION. 241 

judgment was delivered by the Privy Council, the question LECTURE 
again came before the High Courts of Bombay and Mad- VI - 
ras, but the learned Judges thought that a rule of property 
had been established in those provinces by judicial decisions 
which ought not to be disturbed, and which the Privy Coun- 
cil never designed to disturb. (Cf. Shankarbhai Oulabbhai v. 
Kossibhai Vithalbhai, IX Bom.H. C. Rep., 69; Lakshmi Chel- 
liah Garee v. Krisha Bhupati Devi, VII Mad. H. C. Rep., 6.) 
The question, however, was again brought up before the 
Privy Council in the case of Thumbusawmy Mooley v. Hos- rhumfm- 
sain Roihen (I. L. R., I Mad., 1), when their Lordships strong- "wy v. 
ly condemned the action of the Madras, as well as of the Houmit - 
Bombay, High Court, of the former since 1858 and of the 
latter since 1864-, as an unjustifiable encroachment on the 
province of the legislature. Their Lordships pointed out 
that, according to what may be called the common hiw of the 
country, the essential characteristic of a mortgage by con- 
ditional sale is that, on the breach of the condition of re- 
payment, the contract executes itself and the transaction 
is closed and becomes one of absolute sale without any 
further act of the parties or accountability between them (6). 
The Judicial Committee further observed that a contract of 
mortgage, unless modified by actual legislation or established 
practice, is enforceable according to its letter, and they ap- 
proved of the decision of the Calcutta High Court in the case 
of Surrefunnisa v. Shaik Enayet Hossein(V Suth.W. R., 88), 
that Regulation XVII of 1806 had no retrospective operation 
and could not affect a mortgage by conditional sale which 
had become absolute according to the strict agreement of 
the parties before the Regulation came into force. Their 
Lordships concluded their judgment in these words: "The 
state of the authorities being such as has been described, 
it may obviously become a question with this committee 
in future cases, whether they will follow the decision in 
the XIII Moore Ind. App., which appears to them based 
upon sound principles, or the new course of decision that 
has sprung up at Madras and Bombay which appears to 
them to have been inits origin radically unsound. On a state 
claim to redeem a mortgage and dispossess a mortgagee, who 
had, before 1858, acquired an absolute title, there would be 

(&) The judgment of Westropp, C. J., in Bapvji v. Sena (I. L. R, II 
Bean., 231) is an elaborate attempt to shew that the equity of redemp- 
tion was recognized by the ancient common law of the country. See 
also the cases cited in argument in Dowcett v. Wise (II Ind. Jur., 280). 

R. B. G., M. 16 



242 



LAW OF MORTGAGE. 



LECTURE 
VI. 



Remedy 

suggested. 



Madras 
cases on 
point. 



Right to 
redeem. 



strong reason for adopting the former course. In the case of a 
securitj'" executed since 1858, there would be strong reasons 
for recognizing and giving effect to the Madras authorities 
with reference to which the parties might be supposed to 
have contracted. Their Lordships abstain from expressing 
any opinion upon this question until the necessity for deter- 
mining it shall arise. "They deem it right, however, to ob- 
serve that this state of thelaw is eminently unsatisfactoiy and 
one which seems to call for the interposition of the Legislature. 

" An Act affirming the right of the mortgagor to redeem 
until foreclosure by a judicial proceeding, and giving to the 
mortgagee the means of obtaining such a foreclosure, with 
a reservation in favor of mortgagees whose titles, under 
the law as understood before 1858, had become absolute 
before a date to be fixed by the Act, would probably settle 
the law without injustice to any paity." 

The rule which has since been adopted in Madras, is to al- 
low the equity of redemption only with regard to mortgages 
entered into subsequent to the 3 T ear 1859, and to disallow it 
in other cases, although one of the learned Judges protested 
against this rule of construction on the ground that the 
course of decisions, with reference to which the parties are 
supposed to have contracted, could have produced ' but an 
infinitesimal effect upon the contracting public in the depths 
of the country.' (Ramasami Sastrigal v. Samiyappana- 
yakan, I. L. R., IV Mad., 179 ; Bapirazu v. Kamarazu, 
I. L. R., Ill Mad., 26 ; Thumbusawmy v. Hossain, I. L. R., 
I Mad., 1 ; Mavulali v. Gundu, I. L. R., VI Mad., 339 ; Mal- 
lik v. Mattik, I. L. R., VIII Mad, 185.) The Bombay High 
Court, however has refused to recognize any such distinc- 
tion and permits redemption in all cases, whether the mort- 
gage was created before or after 1864, although in mort- 
gages created before that year the Court acts in a more 
liberal spirit towards the mortgagee as regards allowances 
for repairs, improvements, &c. (Kanaylal v. Pyarabai, 
I. L. R., VII Bom., 139 ; cf. Smith v. Sampson, 7 Moore 
Privy Council, 205.) 

The recognition of the right to redeem was, no doubt, a 
strong measure at first, due to the influence of English law 
not always perhaps very correctly appreciated or followed. 
It seems that the Madras Court, under the impression that 
the clause of forfeiture was a penal clause, went so far at 
one time as not to allow a foreclosure in any case but only 
a decree for sale, but the practice has since been abandoned. 



LEGAL MAXIMS. 243 

I may here mention that it has been held by the Allahabad LECTURE 
High Court, tliat in the case of a verbal mortgage by condi VI - 
tional sale, the estate becomes the absolute property of the 
mortgagee immediately on the default of the mortgagor. 
(Gobardhan Das v. Gokaldas, I. L. R., II All., 633). And 
this judgment would seem to be in strict accordance with 
the rulings of the Privy Council ; the case being unaffected 
by Regulation XVII of 1806, which applies only to mort- 
gages in writing ; parol mortgages being either inadvert- 
ently or otherwise left wholty unprovided for. 

We thus find that, in nearly all the provinces of this Maxims on 
country, the debtor retains a right to redeem, notwith- the P int ' 
standing the non-payment of the money on the appointed 
day. This right is very jealously guarded, and in England 
a large number of maxims have clustered round it. One 
of these is the well-known proposition " once a mortgage 
always a mortgage." This maxim requires some explana- 
tion, as the language in which it is expressed is likety 
to mislead the student. It means, it is true, that 
no agreement of the parties can control the right of 
redemption ; but then it has reference only to stipulations 
entered into at the time of the mortgage, and not to agree- 
ments entered into subsequently ; and, as I shall presently 
explain, there is good reason for this distinction. The right 
to redeem, I must tell you, is of the essence of the mortgage, 
and ma} r not be waived or varied even with the consent 
of the parties. Any agreement, therefore, at the time of 
the mortgage, by which the right of redemption is limited, 
either as to the persons entitled to redeem, or the period 
within which the right must be exercised, is wholly inopera- 
tive. Thus, for instance, if the mortgagor should agree that 
the right to redeem shall be confined to his life, his heirs after 
his death will, notwithstanding such agreement, be permit- 
ted to redeem. And, as we have already seen, an assignee 
of the equit}r of redemption will also be entitled to redeem, 
notwithstanding the existence of a covenant not to assign 
by the mortgagor. In fact, no limitation can be success- 
fully imposed on the mortgagor's equity of redemption, a 
right which the law will not suffer to be clogged or fettered 
even with the assent of the mortgagor (c). 

(c) It is scarcely necessary to state that the right of the mortgagor 
to redeem cannot be defeated by any unauthorized acts of the mort- 
gagee, for instance, an exchange or partition made by the latter without 
the consent of the mortgagor. (Mvzlnir Hosxeinv. Hur Pershad, XV 
Suth. W. R., 353 : cf. Oomrao v. Nizam, I Agra H. C. Rep., 224.) 



244. 



LAW OF MORTGAGE. 



LECTURE 
VI. 

Allahabad 
case. 



lu Ramsorun Lai v. Amirta Kuar (I. L. R., Ill All., 369), 
a purchaser from the mortgagor was allowed to redeem, 
although the deed said that redemption was to be allowed 
"only if the mortgagor paid the money from his own 
pocket without transferring the property. Nor should the 
same be cancelled if the money was paid or deposited by 
transfer of the property sold." (Dukchore v. Hedayat, Agra 
H. C. Rep., F. B., 7 ; Mahomed v. Banee, I All. H. C. Rep., 
135 ; Sheopal v. Deendyal, V All. H. C. Rep., 145 ; Ramroop 
v. Lalla Thakoor, XXIV Suth. W. R., 429.) Indeed, it 
is only in very exceptional cases that the Court would 
recognize the validity of any such reservation (for an in- 
stance, see the English case of Bonham v. Newcomb, 1 Vern., 
232, where the conveyance was in tlie nature of a famil}?- set- 
tlement, 2 White & Tudor, L. C., 1189.) Of course, if the 
transaction amounts, not to a mere mortgage, but to a sale 
with a clause for re-purchase, the question would, as I have 
already explained, have to be decided on a different principle. 

The rule that the equity of redemption may not be 
clogged with a bye-agreement is also illustrated by the 
recent case of Mohammed Muse v. Gijibhoy (I. L. R., IX 
Bom., 524), where it was held that a condition in a mort- 
gage that if the mortgagor redeems the property, the mort- 
gage right should be extinguished, but that the property 
should for ever remain in the possession of the mortgagee 
on his paying a fixed rent is a condition which cannot be 
enforced in favour of the mortgagee. It is true such a 
condition does not absolutely exclude the right of re- 
demption; but it has the effect of fettering it with an 
onerous obligation, and cannot therefore be enforced as 
against the mortgagor. The same principle has been 
applied perhaps with doubtful propriety in some cases in 
which the mortgagor has been allowed to redeem with- 
out paying other debts due to the mortgagee where the 
language of the deed did not create a further charge, but 
only amounted to a covenant to pay all existing debts before 
payment of the mortgage-debt. (Rama v. Martand, I. L. 
R., IX Bom., 236, note. Of. Hari v. Balambhat, I. L. R., IX 
Bom., 233, where, however, the suit was brought by the as- 
signee of the equity of redemption and not by the original 
mortgagor (cZ). (But see Allu v. Roshan, I. L. R., IV AIL, 85.) 

(rf) I am not quite sure that such was not also the case in Rama v. 
Martand, although the language used by the Court is very general. 
See Yaslivant v. Vithola (I. L. R., XII Bom., 231 ; cf. p. 234). 



RIGHTS OF MORTGAGEE. 245 

The mortgagee is never allowed to obtaiu any advantage LECTURE 
from his security beyond his principal, interest, and costs. VI - 
Thus, where the mortgage-deed contained a condition that 
if the principal were not repaid by a certain day, the mort- 
gage should ^ouly be redeemed by payment of a certain 
quantity of rice for each rupee of the mortgage-money, it 
was held that the condition was unreasonable and oppres- 
sive, and could not therefore be enforced by the mortgagee. 
(Mayilaraya v. Subba Roy, I Mad. H. C. Rep., 81 : cf . Asapal 
v. NunJcoo, III Agra H. C. Rep., 216.) The principle is well 
illustrated in several English cases in which the Court has 
refused to give to the mortgagee any collateral advantage not 
strictly belonging to the contract of mortgage. Thus, where 
money was lent on mortgage at six per cent., and by a deed 
of even date the mortgagor agreed to convey, at the request 
of the mortgagee, ground-rents at twenty years' purchase, 
the Court decreed redemption on payment of merely prin- 
cipal, interest, and costs. (Jennings v. Ward, 2 Vern., 520.) 
So, again, if a mortgage is made redeemable upon payment 
of the mortgage-money at a certain day, but with a condition 
that if the money is not then paid the mortgage shall become 
absolute, if the mortgagor will pay an additional sum, the 
estate will notwithstanding be redeemable by the mortgagor 
until it is regularly foreclosed by the mortgagee. (Willet v. 
Winnell, 2 Vern., 488.) Indeed, English equity has gone so 
far as to hold that a stipulation at the time of the loan that 
unpaid interest will be converted into principal cannot be 
enforced against the mortgagor, and that the abolition of 
the usury laws has not had the effect of withdrawing the 
protection which the mortgagor had always enjoyed in the 
Court of Chancery. (See the cases collected in White and 
Tudor's Leading Cases, Vol. II, pp. 1184-1185.) 

But every condition made by a mortgagee with the 
mortgagor will not be regarded as invalid by the Court, 
although it might have remotely the effect of fettering 
the equity of redemption. Qualified restrictions on the 
remedies of the mortgagor are allowed as well in this 
country as in England. " The parties may make any 
conditions or covenants so long as these are not in them- 
selves illegal, as that the mortgagee in possession shall 
pay the mortgagor a certain allowance or rent; that 
the loan shall be repayable by instalments, and that in 
default of payment of any one instalment, the mortgagee 
shall be entitled to foreclose for the balance then due ; 



246 LAW OF MORTGAGE. 

LECTURE * * * that after payment of Government revenue and 
VI ; village expenses the mortgagor shall pay to the mortgagee 
the entire surplus collections, aud also all that may be 
derived from alluvion, and that if in the month of Jait in 
any year, the whole surplus is not paid to the mortgagee, 
he shall be entitled to enter into possession ; that if any 
ground shall be lost from the encroachment of a river 
bordering on the estate, the mortgagor shall make good 
the loss, and if anything is gained from the same river, 
the mortgagee shall make an allowance for it ; that a 
third party named, as well as the mortgagor, shall have 
the right of redeeming ; that the mortgagor shall make 
good the balances of rent unpaid by cultivators * * * * 
that the mortgagor not retaining possession shall pay the 
Government revenue." Macphersou, pp. 134, 185. 

Time not of <Tj} ie m axim " once a mortgage always a mortgage " is a 

til 6 6S3G11C6 

of the logical corollary to the doctrine, which is the very founda- 
coutract. tion of the law of mortgages, that time is not of the essence 
of the contract in such transactions. The protection which 
the law throws round the mortgagor would be wholly 
illusory if the mortgagee were permitted to restrict the 
right of redemption within such limits as he might choose 
to impose on the mortgagor. (Samathel v. Mather Sri, 
VII Mad. H. C. Rep., 395.) The debtor, who agrees to 
forfeit his property if the money is not paid on the 
appointed day, might be easily induced by the creditor to 
waive the benefit which the law has secured to him, and 
this accounts for the jealousy with which the right of 
redemption is guarded in every system of jurisprudence. 
There is a curious case which you will find in the English 
books in which the mortgagor was permitted to redeem, 
.although he had solemnly sworn never to exercise the 
right. To the general rule that a mortgagee shall not 
derive any collateral advantage from his mortgage, English 
lawyers, however, recognize one exception. An agreement 
securing to the creditor a right of pre-emption of the equity 
of redemption is regarded as valid by the English Court 
of Chancery. I am not, however, aware of any case in 
which the doctrine has been followed in India. 
Restraint I have already said, that the rule directed against any 
of redelnp- attempt to fetter the equity of redemption applies only 
tion. to agreements made at the time of the mortgage, as the law 
presumes that the debtor is then completely at the mercy 
of the creditor, who, unless restrained by the law, might 



JUGHT OF HEDEMPTION. 

impose his own terms, however exorbitant. But the parties LKCTUBB 
are at liberty to contract with one another, in any manner VI 
they please, after the execution of the mortgage, although 
such transactions are not, on other grounds, viewed witli 
favor by Courts of Justice. The distinction, however, 
between transactions at the time of the mortgage and those 
subsequent to the mortgage, is extremely important and 
must be carefully borne in mind. (See the authorities cited 
in 1 White and Tudor, L. C., p. 188.) I have heard it serious- 
ly argued that a mortgagee may not buy in the equity of 
redemption, and that, except by the process of foreclo- 
sure, he cannot become the absolute owner of the pledge. 
This would, however, be an unjustifiable extension of the 
maxim, suggested probably by the language in which it is 
frequently expressed. (Ranu v. Mamabai, VI Bom. H. C. 
Rep., 265, A. C. J. ; Anagi v. Dkundhud, Bom. P. J., 1874, 
133; Majcoomar v. Ramsuhaye, XI Suth. W. R., 151; 
Dhunnoo v. Boorhan, VII Macnaghten's Sel. Rep., 181 ; 
Goordyal v. Hunskoonwer, II Agra H.C. Rep., 176, but see 
Kaseenath v. Bheekaree, Suth. W. R., F. B., 79. See also 
the cases cited in 2 White and Tudor, L. C., 1187. I must 
warn you that legal maxims, as observed by a learned writer, 
are for the most part were symbols, useful to the lawyer as a 
kind of technical short-hand, suggesting definite groups of 
legal facts, but which are only misleading if they are 
supposed to mean anything else. (Pollock's Essays, 256.) 
There is another familiar maxim in connection with the 
subject "he who seeks equity must do equity;" but I 
reserve the discussion of this maxim for another lecture. 

I propose to discuss in the next place the persons who Persons 
are entitled to redeem. Now it may be laid down generally 
that not only the mortgagor himself, hut also any person 
having an interest in, or lien on, the property, is entitled 
to redeem. As a judgment-debt in this country does not 
create in itself a charge on land, it is doubtful if a judg- 
ment-creditor, merely as such, has a right of redemption. 
He has, however, only to attach the property, and as an 
attachment operates as a statutory hypothecation, the 
attaching creditor acquires the right to redeem the mort- 
gage. The point was substantially decided in the case of 
Mohun Lall Sukul, to which I have already had occasion 
to refer. (See however Soobhcd Chunder Pal v. Net ye 
Oharan Bysack, I. L. R., VI Calc., 663 ; RadJie Tewari v. 
Bujha Mis); I. L. R, III All., 413.) 



248 



LAW OF MORTGAGE. 



LECTURE I need hardly add that the right of redemption may be 

VI ' claimed by the heir or devisee of the mortgagor, and, 

Heir of generally speaking, by any person who, either by volun- 

mortgagor tary O r involuntary assignment, succeeds to the whole or a 

entitled to \. ~ ,, . J , , f ., . ., , , 

redeem. portion ot the rights of the mortgagor, in the whole or a 
portion of the mortgaged property. [Sheogolam Singh v. 
Ramroop Singh, XXIII Suth. W. R., 25 ; Kishen Ballabh 
v. Belasoo Coomar, III Suth. W. R. (e).] 

tesse^f en"^ -^ would seem that a lessee claiming under a beneficial 
tied to lease is also entitled to redeem. " In this country patnis, 
redeem. zuripeshgee leases, and interests of that nature are very 
considerable interests in. the land, and cannot be looked 
upon as mere leases for a term of years which a mortgagee 
might have the right to disregard. They are in fact 
substantial proprietorial interests, on the grant of which 
considerable premiums are paid ; and it is only equit- 
able, that persons in that position should be allowed the 
opportunity of preserving their interests by redeeming any 
mortgages made by the superior holder " (per PONTIFEX, 
J., in Kasumunnissa Bibee v. Nilratna Bose, I. L. R., VIII 
Calc., 79 ; see also Byjnath Sing v. Gobardhan, XXIV 
Suth. W. R., 210; Radha Pershad v. Monohur Das, 
I. L. R., VI Calc., 317; Koldl Singh v. Motterjeet, V Cal. 
L. Rep., 243 ; but see Lalla Durga Pershad v. Lalla 
Practice of Luchman Phalbuj, XVII Suth. W. II., 372 ; Sri/putty Churn 
Courtof Dey 7' Mohi P Wary* Sing, XIII Cal. L. Rep., 119). The 
Chancery. English law would also seem to recognize the right of a les- 
see to redeem. (Keech v. Hall, 1 Smith, L. C., 523.) A third 
person, to whom the right of redemption has been expressly 
reserved, may also redeem (N. W. P., 1848, p. 187). So also 
mayapuisue incumbranceras we have already seen. (Sankana 
Kalana v. Virupakshapa Oaneshapa, I.L. R., VII Bom. ,146 ; 
Radha Bai v. Shamva Vinayak, I. L. R., VIII Bom., 168). 
But his right to redeem is subject to this condition that he 
cannot do so without bringing the mortgagor before the Court. 
The right of the puisne mortgagee to redeem is not, there- 
fore, absolute, as he cannot redeem before he is entitled to 
foreclose. It will not, perhaps, be out of place here to 
observe that a person having only a partial interest cannot 

(e) In Jugganath v. Apaji (V Bom. H. C. Rep., 217, A. C. J.), a 
donee from a Hindu widow of the equity of redemption was nob allowed 
to redeem ; but the case was a peculiar one, and cannot safely be fol- 
lowed. As one of the learned Judges pointed out, there was only a very 
small interest involved in the suit and a vast amount of litigation in 
store, if the point was decided in favour of the donee. 



RIGHT OF REDEMPTION. 249 

redeem without making the others interested parties to LECTURE 
the suit. (Gansavant v. Narayan, I. L. R., VII Bom., 467 ; VI - 
Henley v. Stone, 3 Beav., 355.) A surety is also entitled 
to redeem by virtue of his right to avail himself of the 
creditor's securities. I may mention that even a creditor 
or legatee will be allowed to redeem if a case of fraud or 
collusion is made out (/). 

This is the present state of the law iu Bengal, which Bengal 
has been gradually built up on the provisions of the 17th Law - 
Regulation of 1806, which impose upon the mortgagee the 
necessity of serving the foreclosure proceedings upon the 
" mortgagor or his legal representative," an expression 
which, as we have already seen, has been held by judicial 
interpretation to embrace every person who claims an Law in the 
interest in the mortgaged property. There is no statutory f her P r - 
enactment in the other provinces, but the law, as it is V1 
administered at the present day by the Courts of Justice, is, 
in this respect, substantially the same as in Bengal, botli 
being very largely shaped by the practice of the English 
Court of Chancery. 

A mortgagee may not allege that the title of the mort- 
gagor is defective. (Tasker v. Small, 3 My. & Cr., 70 ; 
Abdoolrujjuk v. Sadlk All, IV & V Agra H. 0. Rep., 142; 
1 Spence's Equity, 609.) But although he is estopped 
from disputing the title of the person who made the mort.- 
gage, he may put any person claiming derivatively from 
the mortgagor, to proof of his title. The mortgagee is not 
bound to give up the property to any person who may start 
up with the allegation that he has succeeded to the rights 
of the original mortgagor ; on the contrary, it is his duty 
to admit no claim upon it until assured of the title of the 
claimant. (KeenJiya Loll v. Syud Dadalee, >. D. A., 1859, 
p. 1273.) No person will be entitled to redeem at his 
peril, leaving the rightful owner to recover against him 
(1 Spence's Equity, 668 ; Jhuver Bhai v. Narain, Bom. 
P. J., 1874, 1.) It seems that the purchaser of the equity 
of redemption from a Hindu widow, will be bound to prove 
that the alienation was justifiable under the Hindu Law. 
(Dhondoo v. Salkrishna, I. L. R., VIII Bom., 190.) A 
primd facie title, however, will be sufficient, as the decree 
in an action for redemption does not bind third persons 

(/) It ought to be noticed that a person claiming under an assign- 
ment pendente lite, cannot bring a suit to redeem. (Ramchundra v. 
Jfahadaji, I. L. R., IX Bom., 141.) 



250 LAW OF MORTGAGE. 

LKCTUKB (Fisher's Mortgage, p. 674). And it seems, a person origiu- 
VI - ally with an imperfect title will be allowed to redeem if 
a perfect title is established at the hearing. (Krishnaji v. 
Ganesh, I. L. R., VI Bom., 139.) Then again, a mortgagee 
has only a right to be satisfied that the person claiming 
to redeem is not an absolute stranger, arid cannot avail 
himself, for instance, of the objection that the plaintiff has 
not paid the full amount of the purchase-money to his 
vendor, the mortgagor. (Heera Singh v. Raghunath, IV & 
V Agra H. C. Rep., 30.) 

Mortgage It is necessary to observe that a mortgage security is 
indivisible indivisible, and that no one is entitled to redeem a part 
of the estate in mortgage on payment of a proportionate 
amount of the debt secured by the mortgage ; you must 
cither redeem the whole, or not at all. Thus, if four 
brothers, each of whom is entitled to a fourth share of an 
estate, mortgage it to a creditor as security for a debt 
contracted by them, one of the brothers cannot redeem his 
share on payment only of a fourth part of the debt secured 
by the mortgage. He would, no doubt, have a right to 
redeem the whole, but he cannot redeem a part, although 
there may be no question as to the extent of his share. 
(See Mujeedoonissa v. Dildar, XIV Suth. W. R, 216 ; 
Chandika v. Phokar, I. L. R., II All., 906 ; Balambhat v. 
Sitaram, Bom. P. J., 1883, 312; Bliugwun v. Mahomed, 
IV All. H. C. Rep., 161 ; Hashim v. Aivjeet, Suth. W. R, 
1864, 217; Ram Baluk v. Ramlal, XXI Suth. W. R, 428 ; 
Hureehur v. Dabee Sahoy, Suth. W. R., 1864,260; Razee- 
oodeen v. J/iubboo, Suth. W. R., 1864, 75 ; Saligram v. 
Barun Red, IV All. H. C. Rep., 92.) 

Caseofsev- I ought to mention that one of several mortgagors on 
ga"-ors! lt " redemption of the whole mortgaged property will be entitled 
to a lien on the shares of his co-mortgagors. The purchaser 
of part of an estate under mortgage, for instance, is entitled 
to redeem the whole, if the mortgagee insist on it, and in 
that case he puts himself in the place of the mortgagee 
redeemed, and acquires a right to treat the original mort- 
gagor as his mortgagor, and to hold that portion of the 
estate in which he would have no interest but for the pay- 
ment as a security for any surplus payment he may have 
made. [Asansab Ravuthan v. Vamana Raw, I. L. R., II 
Mad., 223 ; Punchum Sing v. Aliahmad, I. L. R., IV All., 
58; see also Gobindpershad v. Dtvarkanath, XXV Suth. 
W. R, 259 ; Vithal Nilkanth v. Vishvasrab, I. L. R., VIII 



EIGHT OF REDEMPTION. 25 J 

Boin., 497; Hirachand v. Abdul, I. L. R., I All., 455; LKCTUBH 
Ganesh v. Raghu, Bom. P. J., 1880, 300 ; Pandji v. Sada- VI. 
s&ifc, Bom. P. J., 1881, 57, and the cases collected in Mac- 
pherson's Mortgage, pp. 342-343 (#).] 

You will, no doubt, find in the books several cases in Redemp- 
which a mortgagor has been permitted to bring a suit for 'I " " f por " 
possession of a portion of the mortgaged property, on the mo'JtgUed 
allegation that the whole of the debt secured by the mort- P ro P ert J'- 
gage has been satisfied. These cases, however, are no real 
exception to the rule that a mortgage-debt is indivisible, 
for in the cases to which I refer, there is no longer any 
debt due to the mortgagee. (Hurdeo v. Guneshee LalL, 
I Agra H. C. Rep., 3 ; see also I Agra, 3C ; IV Agra, 33.) In 
every such suit, however, the co-mortgagors should be placed 
on the record as defendants if they refuse to join in the 
action; but the plaintiff will be entitled to recover possession 
of his own share only. ( Fakir v. Sadat, I. L. R., VII All., 
37G. But see MirzaAll v. Tara Soonderee, II Suth. W. R.^ 
150.) It is necessary that all the parties should be before the 
Court, as the mortgagee might otherwise be harassed by 
twenty different suits, and although the language used by 
the Court in some reported cases is not free from ambi- 
guity, I do not think that it was ever intended to lay down 
the broad proposition that one of several mortgagors could 
sue without bringing in his co-mortgagors (h). (Ragho v 
Balkrishna, I. L. R., IX Bom., 128.) 

Cases in which the interests of the mortgagors appear Case of in- 
to be distinct and separate on the face of the instru- terest of 
ment, are sometimes supposed to form an exception to ^ee 
the rule that a mortgage-security is indivisible. There distinct 
is, however, no foundation for the notion except some 
carelessly reported dicta in Mulik Basab v. Dhana Bebee 
(VIII N. W. P., 220), and Hamkristo v. Ameeroo- 
nisa (VII Suth. W. R., 314) (i). It is true an instru- 
ment may be so worded that each of the mortgagors 

(g) As to form of the decree where the co-mortgagors are not parties, 
see Ganpati v. Damodar, Bom. P. J., 1874, 2. 

(/() As to the Court in which such suits should be brought, the law 
cannot be said to be quite settled, and, this is mainly owing to the 
difficulties inseparable from a system in which the jurisdiction of Civil 
Courts is regulated by the value of the subject-matter in dispute. ( Gobi ml 
Singh v. Kallu, I. L. R,, II All., 778 ; Bahadur v. Hawaii. I. L. R.. Ill All., 
822; Amanatv. Bhajan, I. L. R., VIII All., 438; Rupchand v. Bal- 
Ihant. I. L. R., XI Bom., 591, and the cases there cited. 

(i) See also the cases cited in Macpherson's Mortgage, p. 348; the law 
laid down in these cases seems, however, to be extremely doubtful. 



252 LAW OF MORTGAGE. 

LECTURE may redeem his share on payment of a rateable portion of 
VI - the mortgage-debt. (For instances, see Ramsaran v. 
Amrita Kuar, I. L. R., Ill All., 369 ; Sheogolam v. Ramrup, 
XXIII Suth. W. R., 25.) But such a clause is seldom, if 
ever, found in a mortgage-deed, and cannot safely be 
inferred merely from a recital of the different shares of the 
mortgagors in the document. Similarly, if a mortgage is 
made to two persons jointly, the mortgagor cannot redeem 
without discharging the whole debt, although the deed may 
specify the proportions in which the mortgage-money is 
owned by the mortgagees. (Iman Ali v. Oograh Sing, 
XXII Suth. W. R., 262.) 

Effect of To the general rule, however, that a mortgage must be 
mortgagors re( j eera ed entirely or not at all, there is one well-known 

purchasing i ,1 , i ,1 . c i 

portion of exception, and that is where the equity ot redemption ID apor- 
mortgaged fcj on O f the mortgaged property becomes vested in the mort- 
proper j. gjg^jjjjjj^^ "[ n suc h cases the mortgage-security is broken 
up, and the mortgagor or his representatives become entitled 
to redeem on payment of a proportionate part of the debt 
charged on the property. Thus, where two villages were 
mortgaged by the same instrument as security for one 
sum, and they were both subsequently sold under an 
execution against the mortgagor, and one of them was 
purchased by the mortgagee himself, and the other by a 
third person, the execution-purchaser was allowed to 
redeem on paying a proportionate part of the mortgage- 
Contribu- debt. As pointed out by Morgan, C.J., in giving the judg- 
tion. ment of the Court in Mahtab Singh v. Misree Lall, "A 
mortgagee is entitled to say to each of several persons who 
may have succeeded to the mortgagor's interest that he shall 
not be entitled to redeem a part of the property on pay- 
ment of part of the debt, because the whole and every part 
of the land mortgaged is liable for the whole debt. But it 
does not follow from this, that a mortgagee, who has 
acquired by purchase a part of the mortgagor's rights and 
interests, is entitled to throw the whole burden of the 
mortgage-debt on the remaining portion of the equity of 
redemption in the hands of one who has purchased it at a 
sale in execution of a decree against the mortgagor. Each 
has bought subject to a proportionate share of the burden, 
and must discharge it." (II Agra H. C. Rep., 88 ; see also 
Nathu Sahu v. Lalla Ameer Chund, XXIV Suth. W. R., 24 ; 
Bisheshar Singh v. Laik Singh, I. L. R., V All., 257; Ali 
Khan v. Mahomed, Bom. P. J., 1881, 319 ; Sakaram v. 



CONTRIBUTION. 253 

Gopal, Bom. P. J, 1883, 51 ; Kesree v. Seth, II All. H. C. LECTURE 
Hep., 4 (j). Similarly, where aii usufructuary mortgagee VI - 
of different plots of land abandoned his possession of one 
plot and took a lease from the purchaser of that plot, it 
.was held that the mortgagee had, by his own conduct, des- 
troyed the individuality of the original contract and the 
purchaser of the other plot was let in to redeem on pay- 
ment of a proportionate part of the mortgage-debt. 
[Marana Ammanna v. Pendiyalla Perubotulu, I. L. R., 
Ill Mad., 230 ; cf. Subramanyan v. Maudayan, I. L. R., 
IX Mad, 453 (/<;).] 

These cases, however, must be carefully distinguished Case in 
from another class of cases with which they may be easily t Ton C of P r ~ 
confounded. The principle laid down iu Mahtab Sing v. equity of 
Misree Lall (II Agra II. C. Rep, 88) will not apply to r Sd u 
a case in which the equity of redemption of a portion of inamort- 
the mortgaged property becomes vested in one or more gngee< 
only out of several mortgagees, and the reason of this 
distinction is obvious. Where the whole estate as to 
one portion of the pledged property becomes vested in the 
mortgagee, or in all the mortgagees, if there are more 
than one, the mortgagor, if compelled to redeem on condition 
of paying the whole debt, would have an action for con- 
tribution for the excess payment, and thus two suits would 
be necessary in the place of one for the purpose of finally 
settling the rights of the parties. This reason, however, 
which is founded only upon grounds of convenience, does not 
hold good where the purchaser happens to be one of several 
mortgagees. In such a casethe other mortgagees could not 
be sued for contribution, and they might very reasonably 

(j) The dictum of Jackson, J., in Ilirdy v. Alloola (I. L. R, IV Calc., 
72), cannot be supported, as the mortgagee did not in that case buy 
merely the equity of redemption. 

(k) In England, where there are several mortgagees, and the first is 
also part owner of the equity of redemption, the judgment directs that, 
upon payment to the first mortgagee of all that is due to him by the 
second, the former shall convey the whole estate, subject to his right to 
redeem the part in the equity of redemption whereof he is interested ; 
on default of payment, the second mortgagee is foreclosed in the usual 
manner. The owner of the residue of the equity of redemption redeems 
on payment of all that is due, but receives a conveyance only of that part 
iu which he is interested. But query if he ought not to have a con- 
veyance of all, subject to the right of the first mortgagee to redeem his 
share of the equity again, upon payment of a proportion ; on the 
principle that the mortgagee must be entirely redeemed, or not at all ; 
or whether, to avoid such a circuity, the part owner of the equity ought 
not, in the first instance, to redeem the mortgagee on payment of a 
sum proportioned to the redeeming party's share (Fisher 944). 



254 LAW OF MORTGAGE. 

LECTURE complain if by the acts of one of them the indivisible 
VI - nature of the security was altered. Where, therefore, one 
of several mortgagees purchases a part of the property 
mortgaged, the case is governed by tjie general rule, and 
the purchaser of another part has no right to redeem except 
on payment of the whole of the mortgage-debt. (Sobha Sah 
v. Inderjeet, V All. H. C. Rep., 149 ; Mahtab Rai v. Sant 
Lai, I. L. R, V All., 276.) 

Ahmed AH We have seen that when the mortgagee, or if there are 
V Sing WJm ' more than one, all of them jointly purchase the equity of 
redemption in a part of the mortgaged property, they can- 
not insist upon the payment of the whole of the debt 
secured by the mortgage as a condition of the redemption 
of the rest of the mortgaged property. Questions, however, 
of considerable difficulty sometimes arise when the equity of 
redemption in a portion becomes vested in the mortgagee, 
while that in the rest passes to two or more different persons. 
In the case of Naivab Ahmed Ali Khan v. Joivhir Sing, 
the estate having been sold subject to mortgage to different 
persons, one of them being the mortgagee himself, a pur- 
chaser of a portion of the mortgaged property sought to 
redeem his share on payment of a rateable part of the 
mortgage-debt. The purchasers of the other portions were 
not parties to the suit, and on the mortgagee insisting that 
the plaintiff could not succeed without an offer to redeem the 
portion which had passed to the other purchasers, the 
Court refused to make any decree for redemption, being 
of opinion that the mortgagee had a right to insist upon 
the redemption of the whole of the property, with the excep- 
tion of that purchased by himself, on payment of a propor- 
tionate part of the mortgage-debt. (N. W. P., 1864, p. 425.) 
Privy You will observe that all that the Court ruled in the 

decision on above case was, that the plaintiff was bound to offer to 
the point, redeem the whole of the estate with the exception of that 
purchased by the defendant, and not that he was entitled 
to do so if the mortgagee should refuse to part with the 
shares of the other persons. The distinction is important 
and is well illustrated by the judgment of the Privy 
Council in the subsequent suit for redemption between the 
same parties, in which the plaintiff claimed to redeem the 
whole of the mortgaged property with the exception only of 
the portion which had passed to the mortgagee. The de- 
fendant, while conceding to the plaintiff the right to redeem 
the portion which had been purchased by him, resisted his 



EQUITY OF REDEMPTION. 255 

right to redeem the rest. The Court below, being of opinion LECTURE 
that the mortgagee could not be permitted to turn round VI - 
after having " forced the plaintiff to bring the second suit," 
made a decree for redemption in the terms of the prayer 
in the plaint. (Nawab Ahmed All Khan v. Joivhir Sing, 1 
Agra H. C. Rep., 3.) From this decree there was an appeal 
to the Privy Council, when the mortgagee again insisted upon 
his right to retain possession of that portion of the estate 
which had not been purchased by the plaintiff. In giving 
judgment their Lordships observed : " The remaining 
question is what, upon the facts found by the Courts 
below, ought to have been their decree. The appellant 
now complains that the plaintiffs have been allowed to 
redeem as against him the villages other than their own 
village of Hosseinpore, i.e., to put themselves in his shoes 
as mortgagee in respect of these villages ; and further, that 
the decrees were wrong in refusing to treat him as the 
owner under a subsequent purchase of three-fourths of 
Rookumpore. 

" The first objection does not come with a good grace 
from the appellant, who defeated the plaintiffs' former 
suit, on the ground that they had not offered to redeem 
the villages in question, and who, in this very suit, has 
included in his calculation of the amount, which, as he 
alleges, ought to have been brought into Court, the 
shares of the mortgage-debt which he said were charge- 
able on those villages. The Courts below, however, seem 
to their Lordships to have mistaken the effect of the 
former decision of the Sudder Court. It merely ruled that 
the plaintiffs were bound to offer to redeem the villages 
in question ; it did not rule that they were entitled to 
do so, or to acquire the interest of the mortgagee in 
them against his will. It is unnecessary to determine 
in this suit whether, in the peculiar circumstances 
of this case, the former proposition is correct. Their Lord- 
ships are of opinion that the latter cannot be supported. 
They think that the appellant, if desirous of retaining 
possession of these villages as mortgagee, is entitled to do 
so against the plaintiffs, whose right in that case is limited 
to the redemption and recovery of their village of Hos- 
seinpore upon payment of so much of the sum deposited 
in Court as represents the portion of the mortgage-debt 
chargeable on that village." (XIII Moore Ind. App., 404 ; 
XIV Suth. W. R., P. C., 20.) 



256 LAW OF MORTGAGE. 

LECTURE You will observe that the Judicial Committee refused to 
YI - express any opinion as to the correctness or otherwise of 
Allahabad the proposition laid down by the Sudder Dewany Adalut in 
case on the the previous suit. The latter ruling, however, has since 
point ' been followed by our Courts, and it certainly does not seem 
to be open to any serious objection. [Saligramv. Barun 
tfai, IV All. H. C. Rep., 92 (I).] A mortgagee, by pur- 
chasing a portion of the mortgaged property, does, no 
doubt, destroy the indivisible character of his security to 
a certain extent ; but it would be going too far to hold 
that the indivisibility of the debt was absolutely des- 
troyed, so that any one of the other persons interested 
in the equity of redemption might be let in to redeem 
on payment of the proportion of the debt attributable 
to the portion in which he himself was interested. To 
take a simple case, suppose two brothers execute a mort- 
gage of their property. If one of the brothers should 
die leaving three sous, and the other brother should sell 
his share in the mortgaged property to the mortgagee, I 
do not think any one of these sons would be entitled to 
redeem his share without offering to redeem the shares of 
the other representatives of the deceased mortgagor. 
Right to This principle, however, applies only where the mort- 
S a g ee himself becomes the owner of a portion of the mort- 
gaged property. The general rule on the subject undoubt- 
edly is that a person who has any right to redeem at all 
has a right to redeem the whole of the mortgaged property, 
and the mortgagee cannot compel him to redeem only the 
part in which he may be interested. In a very recent 
English case it appears that real and personal estate were 
mortgaged together. On the death of the mortgagor, who 
died leaving a will of personalty, but intestate as to real 
estate, the executrix claimed to redeem the whole of the 
mortgaged property, which claim was resisted by the 
mortgagee, who insisted that her only right was to redeem 
the mortgaged personalty on payment of a proportionate 
part of the mortgage-debt. But the defence was not al- 
lowed by the Court, and the mortgagee was directed, on 
payment of what was found due on his mortgage, to 
convey and assign the mortgaged properties, real and per- 

(Z) The right of one of several mortgagors to redeem cannot, how- 
ever, be defeated by the conduct of the mortgagee post litem mot am, 
either by the purchase of a share in the equity of redemption pending 
a suit for redemption, or by any partial redemption allowed by him. 
(Xarohari v. T : itJutl, I. L. B., X Bom , 648.) 



EQUITY OF REDEMPTION. 25? 

sonal, to the plaintiff, subject to such equity of redemption LECTURE 
as might be subsisting therein in any other person or VI - 
persons. In the course of the argument Lord Justice 
Cotton asked, if there was any case where the owner of one 
of two estates, comprised in the same mortgage, had been 
compelled to redeem that one estate separately ; and in 
giving judgment the learned Judge said: " The mortgage Hall v. 
comprises two properties, one of which, subject to the Coward. 
mortgage, belongs to the executrix. She, therefore, is 
entitled to redeem, but to redeem what ? The appellant 
says ' to redeem the one estate which belongs to her.' But 
there is no precedent for that. The owner of the equity 
of redemption in one of two estates comprised in the same 
mortgage cannot claim to redeem that estate alone. The 
mortgagee might refuse to allow him to do so. So, on 
the other hand, the mortgagee cannot compel him to 
redeem that estate alone he is entitled to redeem the 
whole, reserving the equities between him and the other 
part-owner he can redeem the whole, leaving the rights 
of the other parties interested in the equity of redemp- 
tion to be decided afterwards. The case of Pearce v. Morris 
(L. R, 5 Ch. D., 227) is an instance of this the owner 
of one- fourth of the equity of redemption was allowed to 
redeem the whole, leaving open the rights of the owners 
of the other three-fourths as between them and the party 
redeeming." Lord Justice Lindley added " The plaintiff 
is the executrix of a mortgagor, and asks to be allowed to 
redeem the whole of the mortgaged property. The defend- 
ant asks us to declare that the plaintiff is entitled to redeem 
only the personal estate. Now has the plaintiff a right . 
to redeem a part of the mortgaged property ? I think 
clearly not, except as a matter of arrangement ; neither 
can she be compelled to redeem part. A person who has 
any right to redeem, has a right to redeem the whole of 
the mortgaged property, and not a part of it, unless there 
is a special bargain." (Hall v. Howard, 32 Ch. D, 436 (m) ; 
Ramkristo Manjee v. Amirunnessa, VII Suth. W. R , 314. 

(w) I may mention thai the heir-at-law was not a party to the suit, 
but the Court thought that as he was not known, the objection was not 
a substantial one, and that it would be a new departure and contrary to 
the spirit of recent legislation to refuse redemption altogether until 
he could be found and made a party ; as to the necessity of making all 
persons interested in the equity of redemption, ordinarily, parties, see 
Raglio Sah-i v. JBal Krishna Sukha J?am, I. L. R.. 9 Bom., 128, in which 
however the question of the plaintiff's right to redeem, although raised, 
was not decided by the Court. 

B. B. G., M. 17 



258 LAW OF MORTGAGE. 

LECTURE Of. Wuzeerunessa v. Bebee Saldun, VI Suth. W. R., 240 ; 
VI - Mirza AH Eeza v. Tarasundry, II Suth. W. R., 150; 
Asansab v. Vamana, I. L. R., II Mad., 223 ; cf. Bitthul 
Nath v. Toolseeram, I Agra H. C. Rep., 125, where redemp- 
tion was allowed of the whole with the exception only of the 
share which had been bought by the mortgagee, and this, 
although the mortgage-debt had been satisfied ; the case, 
however, was decided before the Privy Council judg- 
ment in. Naiuab Azimut All's case, XIII Moore Ind. App., 
404, and may not be safely followed.) 

Bombay An exception has, however, as we have seen, been en- 
decisiona grafted on the general rule by the case of Nawab Azimut 
All Khan v. Zoohur Singh (XIII Moore Ind. App., 404.) 
Considerable difficulty, however, has arisen in defining the 
true limits of the exception, and there are conflicting dicta, 
if not decisions, on the point. In the opinion of the Bombay 
High Court, the exception applies only where the mort- 
gagors are the owners of distinct parcels, and not where 
they are either joint tenants or tenants in common; but 
the Allahabad High Court apparently recognizes no such 
distinction. (Kuray Mai v. Puran Mai, I. L. R., II All., 
565.) Referring to the judgment of their Lordships of 
the Privy Council in Naiuab Azimut All's case, Sir Charles 
Sargent observes in the case of Shakeram v. Gopal (I. L. 
R., X Bom., 656 note) : " The ground of that decision we 
appiehend to be that the plaintiffs were only the own- 
ers of a distinct village comprised in the property mort- 
gaged, and not sharers in the whole of such property. In 
the case, however, before the Court of Allahabad, the 
owners of the equity of redemption were tenants in com- 
mon, and except as to the share purchased by the mort- 
gagee, there would appear to have been no reason for 
departing from the ordinary rule, that one of several 
tenants-in-common may redeem the whole, as was practi- 
cally decided, under similar circumstances, in the case to 
which our attention has been drawn by Melvill and Kem- 
ball, JJ." (Alikhan Dandkhan v. Mahomadkhan Sam- 
sherkhan, I. L. R., X. Bom., 658, note. See also Narahari 
Vitalvat, I. L. R., X Bom., 648; cf. Raglw v. Balkrishna, 
I. L. R., IX Bom., 128.) 

Bombay I must, however, confess I find some difficulty in under- 

cases con- standing the distinction taken by the Bombay High Court 

between a case in which the mortgaged property is held 

in several ty and one in which it is held in common tenancy. 



EQUITT OF REDEMPTION. 59 

The mortgagee, by becoming the owner of a portion in the LEOTUHK 
equity of redemption, acquires at least the same right to re- VI - 
deem the shares of those who do not join in the action as the 
plaintiff in the case, and there ought to be no distinction in 
principle between a case in which the mortgaged property 
is held in severalty and one in which it is hekTin common. 
The case of a joint tenancy, no doubt, presents greater 
difficulty. It is clear that in the case of a joint tenancy, 
none of the coparceners can redeem any particular share be- 
fore partition. (Gansabant v. Narayan, I. L. R., VII Bom., 
467.) The real difficulty, however, lies in saying whether the 
plaintiff should be allowed to redeem the whole property, 
leaving the mortgagee to have his rights ascertained and 
defined in a suit for partition, or whether the suit of the plain- 
tiff for redemption should be dismissed, reserving to him the 
right to enforce a partition, or whether a prayer for par- 
tition and redemption may not be combined in the same 
suit. A question of this kind arose in the case of Mora- 
ker Akuth v. Punja Patath (I. L. R., VI Mad., 61), where 
a suit was brought to redeem the whole of the mortgaged 
property by one of the mortgagors, a portion of the equity 
of redemption having been acquired by the assignee of 
the mortgagee in possession of the property. The original 
Court gave the plaintiff a decree, but only for the recovery of 
his share of the lands on payment of a proportionate amount 
of the mortgage- debt. On appeal, the Subordinate Judge 
gave the plaintiff a decree for all the land on payment of 
the whole mortgage-debt. On appeal to the High Court, 
it was contended by the mortgagee that he was only 
bound to surrender to all the co-owners of the land jointly, 
and that at any rate his right to a share in the land ought 
to have been determined in the suit. The High Court 
allowed the appeal and dismissed the plaintiff's suit, on the 
ground that to allow plaintiff to redeem the whole would en- 
able him to get possession of the property to the exclusion 
of the mortgagee who was in possession and had a share 
in the right to redeem. The Court was of opinion that the 
mortgagee could not be required to surrender possession of 
the whole against his consent, until the plaintiff had, by a 
proper suit for partition, ascertained definitely to what 
shares in the property he and the mortgagee were respect- 
ively entitled. A decree for redemption of a portion was 
also disallowed upon the ground, that it could not be given 
without converting the suit into a suit for partition, which 



260 LAW OF MORTGAGE. 

LECTURE the Court was unable to do without the consent of all the 

VI - parties interested in the property. 

Method of I shall now proceed to consider the method by which 
redemp- redemption may be accomplished, and I propose, in the 
first instance, to state the law as it is administered in this 
Presidency. Now the mortgagor may either assert his 
right of redemption actively, or he may be proceeded 
against by the mortgagee seeking to foreclose, when the 
mortgagor may prevent a foreclosure by the repayment 
of the debt within a limited time. For reasons which 
are obvious, except when the mortgagee is in possession, 
a mortgagor seldom, if ever, takes any steps to redeem the 
mortgage till the mortgagee applies for foreclosure. Sec- 
tion 7 of Regulation XVII of 1806, however, applies as well 
to cases in which the mortgagee is in possession as to those 
in which the mortgagor has never parted with the pos- 
Bengai session of the pledge. That section provides, that " when 
law. the mortgagee may have obtained possession of the land on 
execution of the mortgage deed, or at any time before a 
final foreclosure of the mortgage, the payment or established 
tender of the sum lent under any such deed of mortgage 
and conditional sale, or of the balance due, if any part of 
the principal amount shall have been discharged, or, when 
the mortgagee may not have been put in possession of the 
mortgaged property, the payment or established tender of 
the principal sum lent with any interest due thereupon shall 
entitle the mortgagor and owner of such property or his 
legal representative of the redemption of his propertjr. 
Instead, however, of paying or tendering the money to the 
mortgagee, the debtor may deposit the money in the Dewany 
Adalut of the zillah in which the property is situated." 
Forecio- In the last lecture I had occasion to refer in some detail 
Sure> to the provisions of the 8th section of Regulation XVII of 
1806, which relates to foreclosure. That very section 
points out the method by which a foreclosure may be 
prevented, and the redemption of the mortgage accom- 
plished, by the mortgagor. When an application for 
foreclosure is made, the mortgagor is bound to pay to the 
mortgagee, or to deposit in the Dewany Adalut, the prin- 
cipal, or the balance, if any part of the principal shall have 
been paid, together with interest (n), if possession has not 

(n) If the deed is silent as to interest, payment of the bare principal 
will be sufficient to bar foreclosure. (liadhanatli v. Bungo Chunder,Suth. 
W, R., 1864, p. 157 ; Roopnarain v. Madlio, Marsh., 617.) 



FORECLOSURE. 261 

been taken by the mortgagor. It is not necessary that LECTUBB 
the costs incurred by the mortgagee in the matter of the Vf - 
mortgage should be paid. (Zalens Ray v. Deb Shahu, 
Marsh., 167.) And it would seem that a deposit in the 
terms of the Regulation would be sufficient even if 
there is an agreement, that money spent in im- 
provements should be paid by the mortgagor to the xvir T" 
mortgagee (N. W. P., 1853, page 101); nor would it 180G - 
be necessary for the mortgagor to deposit any money 
as interest where the mortgage-bond provides that the 
rents were to be taken in lieu of interest although the 
mortgagee was unable to obtain possession ; the object of 
the Regulation being, as pointed out by the Court, to render 
as definite and precise as possible the amount which has to 
be deposited [I. L. R, III AIL, 653; VIII N. W. P., 441 (o).] 
But the tender or deposit, in order to be good, must be un- 
conditional. It must not be made in such a way as that its 
acceptance will impose a condition upon the creditor, or 
supply evidence of an admission that no more is due than 
the amount tendered or deposited ; and I need hardly add, 
that, as it is the very essence of a tender that the person 
to whom it is made should be at liberty to take the money 
at once, a deposit under the Regulation, which takes the 
place of a tender, must necessarily be bad if accompanied 
by a protest that the money should not be paid away 

(o) A question of some nicety, as to the right of a mortgagee to claim 
interest as part of the mortgage-debt, was discussed by the Allahabad 
High Court in the recent case of Allah Bukfk v. Sada Sur (I. L. R., VIII 
All., 182). 

A deed of mortgage by conditional sale executed in 1872, giving the 
mortgagee possession, contained the stipulation that the principal money 
should be paid within ten years of the date of execution of the deed, 
and that in default of such payment the conditional sale should become 
absolute. It contained the following condition as to interest: " As to 
interest it has been agreed that the mortgagee has no claim to interest 
and the mortgagor has none to profits." The mortgagee however did not 
obtain possession. 

In 1878 the mortgaged property was purchased by the appellant at a 
sale in execution of a decree. In 1884 the mortgagee brought a suit for 
foreclosure against the purchaser and heirs of the mortgagor, claiming 
the principal money with interest at 8 annas per cent, per mensem. The 
defendants pleaded that the plaintiff was not entitled to claim interest. 
It was held that whatever claim he might have against the mortgagors 
for damages by way of interest in consequence of the failure to get pos- 
session under the contract, he had none enforceable in this respect against 
the land which had passed free from charge or interest to the pur- 
chaser. It would seem that the deposit of the principal alone will be 
sufficient where the mortgagee has obtained a decree for possession and 
mesne profits, whether he executes it or not. (Sakriaran v. Lharani. 
Ill Ben. L. Rep., Hl.A.C. J.) 



262 LAW OF MORTGAGE. 

LECTURE to the mortgagee immediately. (Goluckmonee Debea v. 
VI - Nobongomonjoree Debea, Suth. F. B., 14 ; see also S. D. A., 
1847, p. 462 ; S. D. A., 1848, p. 897 ; S. D. A., 1859, p. 852.) 
Deposit A somewhat different question arises when the deposit, 
test* 11 * " i ns ^ ea( i f being clogged with any condition, is merely 
accompanied by a protest that the money is not due, and 
that the mortgage-deed ,is invalid. The question actually 
arose in the case of Prannath Chowdhry v. Rookea Begum, 
which was heard in the last resort by the Privy Council, 
and in which their Lordships held that such a deposit is bad. 
In delivering the judgment of the Board, Lord Kingsdown 
said: "The remaining objection relates to the payment 
into Court in the nature of a tender, which was made 
by the defendant Ramruttun Roy. Ramruttun Roy direct- 
ed the money to be paid out to the appellant, but at the 
same time, in his petition to the Court, he disputed the 
validity of the appellant's title to foreclosure, and expressed 
an intention, amounting to a notice, to sue the appellant to 
recover back the very money which he was tendering. 
Prannath " The meaning of the direction that the money may be 
v. Rookea. p a j^ j n ^ Court clearly is, that the mortgagor may have 
adequate and lasting evidence of that which is put in place 
of a tender, and the mortgagee the security and advantage 
of a deposit in acknowledgment of the title. The mort- 
gagee would have little inducement to take the money, 
waiving his lien by its acceptance, if litigation on the 
very same subject were to recommence upon the accept- 
ance of the money ; and though mere words, in the form 
of a protest, which may accompany a tender, will riot 
defeat, where they can reasonably be regarded as idle 
words, their Lordship thinks that the proceedings of Ram- 
ruttun Roy with respect to the mortgagee's title to fore- 
closure forbid such an interpretation of his language and 
his act." (VII Moore Ind. App., 323. See also Makhun 
Koar v. Jassoda Kuar, I. L. R., VI All., 399; Abdar 
Kuhman v. Kisto Lall Ghose, VI Suth. W. R., 225. Com- 
pare Babu Gobind Prosad v. Dwarkanath, XXV Suth. W. 
B., 259.) 

I may mention that this decision has been sometimes 
criticised as treating a tender with a threat that the money 
is not due as a conditional tender; but the judgment really 
proceeds upon the ground that the Indian Regulations con- 
template cases in which the relation of mortgagor and 
mortgagee is undisputed, and that section 7 of Regulation 
XVII of 1806 was not intended to apply to a case in 



TENDER. 263 

which an alleged mortgagor makes, under protest, a tender LECTURE 
of money upon a mortgage, the validity of which he VI - 
refuses to acknowledge. 

The tender must be made at a proper time and at a pro- 
per place. If no particular place is agreed upon, a person- 
al tender is, generally speaking, necessary. In exceptional 
circumstances, however, a tender may be good if made at 
the mortgagee's house or last place of abode, as, for instance, 
where he is keeping out of the way to avoid the tender 
(Fisher, 737). It is scarcely necessary to observe that a 
tender in order to be valid must be a tender of money, 
except where the parties have agreed impliedly or expressly 
upon some other mode of discharging the debt, a very 
strong instance of which is to be found in the case of 
Lyons v. Skinner (N. W. P., 1853, p. 441). In England 
the law relating to tenders is extremely rigid (p], but the 
rigidity of the English law on the point has been consider- 
ably relaxed by the Indian Legislature, and under the 
Indian Contract Act, it is sufficient if an unconditional offer 
be made to pay at a proper place by a person in a posi- 
tion to pay. (Kanye Loll Khan v. Khetter Money, V Cal. 
L. Rep., p. 105.) 

We must remember that in those parts of India where 
Bengal Regulation XVII of 1806 is in force, the right to 
redeem a mortgage by conditional sale is governed by the 
terms, not of the agreement, but of the Regulation. Where, 
therefore, the mortgagor deposited only the principal debt 
and interest for the last year, alleging that interest for the 
previous years was according to the conditions of the 
document to be recovered by separate suit, it was held 
that his suit for redemption must be dismissed. There 
had been default in payment of the interest due, and by 
section 8 of the Regulation, the mortgage, notwithstanding 
the conditions relied upon, had been finally foreclosed. 
(Mansur All v. Sarju, I. L. R., IX All, 20.) I ought to add 
that in an usufructuary mortgage where there is no stipula- 
tion for interest, the usufruct going in lieu of interest, the 
mortgagee is not entitled to claim any additional sum by 
way of interest, and, generally, when a deed of mortgage 
is silent as to interest, payment of the bare principal within 

O) See the subject discussed in Fisher, pp. 736743. The English 
cases are interesting as illustrating the method adopted by Judges in 
England in dealing with the embarrassments created by archaic rules, 
which, however inconvenient, are too firmly established to be directly 
overthrown by Courts of Justice. 



264 LAW OF MORTGAGE. 

LECTURE the year of grace is sufficient to bar foreclosure. (Radha- 
VI - nath Sen v. Bango Chancier Sen, W. R., 1864, p. 157 ; Roop- 
narain Sing v. Madhab Sing, Marsh., 617 ; Gangaprasad 
Bay v. Enayet, 16 W. R, 251.) 

It may not, perhaps, be out of place here to state that a 
Judge has no discretion to extend the time allowed to a 
mortgagor under section 8 of Regulation XVII of 1806. 
(Mohammad Gari v. Abdul Mohammad, V Suth. W. R., 
Mis., 31.) If, however, the mortgagee takes out the mort- 
gage-money as deposited by the mortgagor within time, he 
cannot afterwards sue for foreclosure. (Nowazush v. 
Woosulunnissa, 6 W. R., 249.) 

It is necessary to observe that only those who are 
entitled to redeem are able to make a valid tender, as the 
mortgagee is entitled to retain the property as against all 
strangers. Where, therefore, an execution-creditor of the 
mortgagor made a tender on his own account which was 
refused by the mortgagee, the mortgagor was not allowed 
the benefit of the tender, on the ground that the execution- 
creditor who made the tender was not entitled to redeem. 
Oopal Loll v. Maharajah Pitambar Singh (III Selc. Rep., 
p. 54). A person, however, who has only a partial interest 
is entitled to make a valid tender. (Pearce v. Morris, 
L. R., 5 Ch., 227, but see Ram Buksh v. Mohunt Ram, XXI 
Suth. W. R., 428.) 

Time with- ^ e now coine to the time within which the money must 

in which be tendered or deposited. Now, the Regulation, as you 

fnusTbe w ^ observe, allows one year from the date of the 'notifi- 

made. cation,' which has been held to mean from the date of the 

service and not of the mere issue of the notice. This was 

decided in the case of Moliesh Chunder Sein v. Mussamut 

Tarinee (X Suth. W. R., F. B., 27). The Court, however, 

refused to say from what point of time the period should run 

when the mortgagor cannot be served. There can, however, 

be little doubt that where substituted service is permitted, 

the period would run from the date of such substituted 

service. I may mention that, in calculating the year of 

grace, the date on which the service is effected is excluded. 

(MoheshChunderSeinv. Tarinee, XSuth. W. R, F. B., 27; 

I Ben. L. Rep., F. B., 14, approved of by the Privy Council, 

Norendro v. Dwarkalal, I. L. R., Ill Calc., 397.) 

Tender or We have seen that the mortgagor is at liberty either 

deposit. tender the money to the borrower, or to deposit it in 

Court within the statutory period of oiie year. If, how- 



TENDER. 265 

ever, the Court is closed on the clay on which the year of LECTURE 
grace expires, a deposit cannot be properly made on the VI - 
first day on which the Court reopens. In order to save 
the equity of redemption, it must be made strictly within 
the- year allowed by the Regulation, aud the rule would 
seem to be the same as well when the Court is closed 
accidentally aud unexpectedly, as when it is closed during 
an authorized vacation. In the case of mortgages, the law 
allows the mortgagor an alternative, and if he prefer, for 
his own security, to deposit the money in the Zillah Court, 
he must avail himself of the privilege at a time when it is 
within his reach. As observed by the Court in a late 
case : " If we were to hold otherwise, we should be allow- 
ing the mortgagor to extend the year of grace at pleasure. 
He might say, ' If I pay the money to the mortgagor, I 
must doit within one year; but if I pay it into Court, I 
shall have thirteen or fourteen months.' " (Komala Kant 
Mytee v. Narainee Dossee, IX Suth. W. R., 583. But see the 
cases cited in Macpherson's Mortgage, p. 521.) 

The class of cases of which the above is an illustration Extension 
must be carefully distinguished from those in which, by an of penod ' 
agreement between the mortgagor and mortgagee, the time 
for payment is extended beyond the statutory period, and 
owing to the unexpected closing of the Court, the deposit 
cannot be made within the time fixed by the parties. This 
point was decided in the case of Davi Rawoot v. Heeramon 
Maliatoon, in which the mortgagee having extended the 
time for repayment to the 25th of November 1863, on which 
day the Court was unexpectedly closed, the mortgagor de- 
posited the money on the first day on which the Court 
reopened, and the question arose whether ther deposit was 
made in time to save the equity of redemption. The Court 
held that the deposit was good; but in giving judgment 
the Chief Justice, Sir Barnes Peacock, made certain observa- 
tions which were certainly not necessary to the decision of the 
case, and are, perhaps, somewhat open to criticism. The learn- Sir Barnes 
ed Chief Justice is reported to have said : " The day fixed 
for payment to prevent a foreclosure of the estate was not 
a day peremptorily fixed by the law, but a day fixed by the 
mortgagee himself. Now Courts of Equity, as a general 
rule, will relieve from forfeiture caused by not doing an 
act on a day fixed by the parties ; and I think they ought 
also to relieve when the day is fixed by l*^and the act is 
prevented by some accident which the person to be affected 



266 LAW OF MORTGAGE. 

LECTUEE by the forfeiture could not prevent, and which was not 
VI - caused by any default or misconduct on his part. Courts of 
Equity will not allow a lessor to forfeit a lease, because the 
rent is not paid on a particular day." Now, although Courts 
of Equity are always willing to relieve against forfeitures 
caused by the non-performance of an act on the day fixed 
by the parties, I am not aware that there is any instance 
of the exercise of such power when the time is appointed 
by statute. Indeed, it is difficult to see how such a power 
could be exercised without trenching on the province of the 
Legislature. Take the Statute of Limitations for instance : 
can it be said that if a plaintiff was prevented by some un- 
foreseen accident, without any default on his part, from 
suing in time that a Court of Justice would be justified in 
receiving his plaint. I should, therefore, venture to think 
that where the period for doing an act is fixed by law, the 
person who would be affected by the non-performance must 
perform io within the statutory period at his peril. 

There is another observation of Sir Barnes Peacock 
which would also seem to be open to question. The learn- 
ed Judge says, " I should hold that the plaintiff has the 
option, either of depositing the money in the Judge's Court, 
or of tendering it, and that if there is a sufficient excuse for 
not depositing it in the Judge's Court, he is not bound to 
tender the money and prove that tender." (VIII Suth. W. 
R., 223.) Now, although the mortgagor may not be bound 
to tender the money to the mortgagee, he should certainly, 
it seems to me, deposit it in Court at a time when it is 
within his reach to do so. The case may be a very hard 
one when the Court is closed unexpectedly, but the mort- 
gagor who defers payment till the last moment, does not 
perhaps deserve much sympathy. 

Year of It very frequently happens that the mortgagee, during 

grace. ^ ne currency of the year of grace, allows an extended period 
to the mortgagor to repay the debt. In such cases the 
mortgagor must take care to tender or deposit the money 
within the limited period, otherwise the mortgage would 
be foreclosed at the expiration of the stipulated time. 
(Goonomonee Dassee v. Parbutty Dassee, X Suth. W.R., 326.) 

Redemp- I have said that the mortgagor may, without waiting 
^ ^ ne mor tga-gee attempts to foreclose, take steps for the 
purpose of redeeming the mortgage, a right which, how- 
ever, may not be exercised before the money falls due. 
(Burno Moyee v. Benode Mohinee, XX Suth. 'W. R., 387.) 



REDEMPTION BEFORE FORECLOSURE. 267 

I ought to add that, under the Regulations, the mortgagor LECTURE 
may, on deposit of the principal, in cases in which the mort- VI - 
gagee has been in possession, call upon the Court to restore 
the possession of the property to him, subject, however, to 
an adjustment of accounts between the parties. (Section 2, 
Regulation I of 1798.) If, however, a less sum is deposited! 
the mortgagor cannot get back into possession except 
under a decree in a regular suit, in wldch all questions 
arising between the parties may be regularly brought 
before, and determined by, the Courts of Civil Justice. C 

In those parts of the country to which the Bengal Regu- 
lations do not apply, the mortgagor may, at any time be- 
fore foreclosure and after default, bring a suit for redemp- 
tion against the mortgagee, when the Court takes an ac- 
count of the amount due on the mortgage-security, and 
allows the mortgagor a certain period, which is usually 
six months, to pay the money. 

In England, it is an established rule of the Court that if 
a bill for redemption is dismissed for any reason except for 
want of prosecution, the dismissal operates as a decree for 
foreclosure (<?). The law, however, cannot be said to 
be quite settled in India Of course, if the decree 
expressly declares that the right of redemption shall be 
extinguished in the event of the non-pcoyment of the money 
by a day appointed by the Court, the mortgagor will be 
foreclosed if he fails to comply with the terms of the decree, 
but a difficulty arises in cases, and they are by no means 
of unfrequent occurrence, in which the decree is not 
properly drawn. In the opinion of the Bombay and Alla- 
habad High Courts, where no definite period for redemp- 
tion is fixed by the decree, the mortgagor must redeem 
within the time allowed by law for the execution of 
decrees, and if he does not do so, the decree will operate as a 
judgment of foreclosure. (GansavantBelsavatit v. Narayan 
Dlwnd Savant, I. L. R., VII Bom. ,467; Anrudh Singh v. 
Sheoprosad, I. L. R., IV AIL, 481 ; Golam Hossein v. 
Alia Rukhee, III All. H. C. Rep., 62; but see Charta v. 
Poorum, II Agra H. C. Rep., 256. A different view, 
however, has been taken by the Calcutta and Madras High 
Courts. Roy Dinkar Loyal v. Sheo Golam, XXII Suth. 
W. R., 172 ; Sami Achari v. Somasundram, I. L. R., VI 

(j) It is true that there is a distinction in England between equit- 
able and legal mortgages in this respect, but the distinction does not 
apply in this country. 



268 LAW OF MORTGAGE. 

LECTUBE Mad., 119 ; Periandip v. Angapa, I. L. R., VII Mad., 423 ; 
YI - Kuruthasami v. Juganatha, I. L. R., VIII Mad., 478. Of. 
Hori Ravji Chiplunker v. Shaperji Hormasji, I. L. R., 
X Bora., 461, in which case, however, the question was left 
open by their Lordships. Distinguish JRadji v. Kaluram, 
XII Bom. H. G. Rep, 160.) 

It is necessary to observe that a mortgage cannot be 
redeemed before the fixed time, even though the mortgagor 
should offer interest during the whole intervening period. 
(llrown v. Cole, 14 Sim., 425.) As a rule, the right to 
redeem and the right to foreclose are co-extensive, and an 
agreement that the principal shall not be called in for a 
definite period will be binding upon the parties. In excep- 
tional cases, however, a redemption may be allowed before 
the fixed time, for instance, when the period is unduly post- 
poned on the ground of unreasonable bargain (r). (Vatju v. 
Vatju, I. L. R., V Bom., 22 ; Sakharam v. Vithu, II Bom. 
H. C. Rep., 225 ; Lilamorji v. Vasudev, XI Bom. H. C. Rep., 
283 ; Maghubar v. Budhulal, I. L. R., VIII All., 95 ; Sree- 
munt v. Krishan, XXV Suth. W. R., 10 ; Chandra v. Isiuar, 
VI Ben. L. Rep., 562 ; 1 Spence's Equity, 668.) No doubt 
in each case the Court must look to the language of the 
instrument to ascertain whether the parties intended 
that redemption should take place only at the end of the 
term or at any earlier period at the option of the mort- 
gagor, but there seems to be a slight conflict of opinion as 
to the mode in which a mortgage contract in which the 
principal is payable at a certain date should be construed. 
In the case of Setra v. Vairri (I. L. R., II Mad., 314), 
it was observed that where a day is fixed for the pay- 
ment of a debt, and nothing more appears, the presumption 
is that the day is fixed for the convenience of the debtor, 
and that he may repay the debt at an earlier period ; and 
in like manner where the mortgage is created as a mere 
security for the sole purpose of ensuring the payment of 
the debt at a certain date, the learned Judges said they 
were not prepared to say that the debtor might not dis- 
charge the debt and put an end to the security at an 
earlier date. (See also Doruppa v. Kundiilteri. Ill Mad. 
H. C. Rep., 363 ; Maslwok v. Maren, VIII Mad. H. C. 

(r) A condition in a mortgage-deed that the mortgage property should 
only be redeemed on the demand of the mortgagee is one which a Court of 
Equity will not give effect to. (Ganpativ. Damodur, Bom. P. J.. 1874, p. 2). 
It is necessary to add that, under the Deccan Agriculturists' Relief Act, 
the right to foreclose and the right to redeem are not co-extenaive. 
(Babaji v. VitJiu, I. L. R., VI Bom., 73i.) 



LIMITATION. 



269 



Rep., 31 ; Nararia v. Kendiala, I. L. B., Ill Mad., 230 ; LECTURE 
compare Puthen Purayil v. Govendam, I. L. R., V Mad., VI. 

310.) But this view is scarcely consistent with the deci- 

sions of the Bombay and Allahabad High Courts to which 
I have already referred, in which it was held that even the 
use of the words " within a certain number of years " was 
not sufficient to justify redemption before the expiration 
of the period mentioned in the deed. 

I have already pointed out that the plaintiff must shew, 
in an action for redemption, a good title to redeem, as the 
mortgagee is entitled to hold against everybody not havin<* 
a paramount title, but a mere primd facie title will 
be sufficient, as the judgment will not conclude adverse 
claimants. 

I now come to the time within which, under the Statute Limitation, 
of Limitations, the right of redemption must be asserted. 
The provisions of the present law are substantially the 
same as those of the previous Acts; article 148, schedule 2, 
provides a period of sixty years, commencing f vom the time 
when the right to redeem accrues to the mortgagor. The 
article, however, is subject to the provisions of section 19, 
by which an acknowledgment, if it fulfilled certain condi- 
tions, would give the mortgagor a fresh start. 

In the case, however, of a purchase for value and in good 
faith from the mortgagee, the suit must be brought within 
twelve years from the date of the purchase. (As to the 
meaning of the words " purchaser for value and in good 
faith," see the case of Radhanath Dass v. Gisborne & Co., 
XIV Moore Ind. App., 1 ; XV Suth. W. R., P. C., 24.) It is 
somewhat remarkable that there is no provision in the 
present Act similar to the proviso contained in section 5 
of Act XIV of 1859 by which the mortgagor was bound 
to sue the purchaser within the time prescribed for a 
suit for redemption, but there can be no doubt that the 
mortgagor will not, under the new Act, have an extended 
period against the purchaser from the mortgagee. The 
proviso to section 5 of the Act of 1859 was probably 
inserted out of excessive caution. 

It is necessary to observe that the period of sixty years 
allowed to the mortgagor is wholly irrespective of the 
nature of the title which the mortgagee in possession may 
assert. The enactment itself is a departure from the rule 
that derivative possession is inoperative for purposes of 
prescription ; and I know of no principle on which the 



270 LAW OF MORTGAGE. 

LECTURE law being silent, we should be justified in holding that a 
VI - derivative possessor could, by his own act, change the 
character of his possession so as to shorten the period of 
limitation. But even if there was any doubt upon the 
language of the Act, the fact that the period may be extend- 
ed by an acknowledgment shows, that the assertion by the 
mortgagee in possession of a hostile title would not have 
the effect of abridging the time fixed by the statute. As 
pointed out by Mr. Justice Hollo way in Tauji v. Nagamma 
(III Mad. H. C. Hep., 137), the period may be extended 
by an acknowledgment, but by no process can it be cur- 
tailed. (See also All Muhammad v. Lulta Baksh, I. L. K, 
I All, 655 ; N. W. P. H. C., 220.) I must, however, con- 
fess that this view is perhaps not quite consistent with 
certain reported decisions of the Calcutta High Court. I 
shall only notice one of these cases, not only because it 
was decided by a very eminent Judge, but also because it 
seems to have been the first case in which it was laid down 
that the period of sixty years might, under certain con- 
ditions, be curtailed. In Loft Hussen v. Abdul AH (VIII 
Suth. W. R., 476), Mr. Justice Dwarkanath Mitter is report- 
ed to have held that, as more than twelve years had elapsed 
from the date of the expiration of the year of grace, the 
mortgagor was not entitled to enforce his right of redemp- 
tion. It was found in the case as a fact that the foreclo- 
sure proceedings were regular, and the Court seems to have 
thought that the mortgagor was bound to assert his right 
of redemption within twelve years of the expiration of the 
statutory year of grace. I must, however, confess that I 
do not understand the reasoning by which the proposition 
is maintained. A plea founded upon the statute always 
assumes that the plaintiff has the right which he claims, 
but that he cannot be permitted to assert the right suc- 
cessfully in a Court of Justice by reason of lapse of time. 
This being so, I do not see how any proceedings taken by 
the mortgagee for the purpose of foreclosure could have 
any other effect given to them than as evidencing a deter- 
mination by the mortgagee to hold possession, not deriva- 
tively as pledgee, but absolutely as owner. But, as I have 
already endeavoured to explain, the mere assertion of a 
hostile title by the mortgagee cannot curtail the period of 
sixty years which the statute allows to the mortgagor to 
redeem his property (s). 
00 See further on the subject of limitation, App. Statutes, tit. Limitation, 



LECTURE VII. 

Usufructuary mortgage What constitutes usufructuary mortgages Personal 
liability of mortgagor Zuripeshgee leases Difference between Zuripeshgee 
and ordinary leases Hunuman Fersad Pandey's case Origin of Zuripeshgee 
leases Rights and liabilities of usufructuary mortgagee before and after 
repeal of Usury Laws Liability to account Hight of redemption of mort- 
gagorSimple usufructuary mortgagee not entitled to decree for sale- 
Limitation. 

A USUFRUCTUARY mortgage is a very common form of uufructu- 
security in this country. The creditor is put into posses- a| y ra<m- 
sion of the mortgaged property, the rents and profits going gage ' 
in lieu of interest, or being applied to the discharge of 
the interest or to the gradual reduction of both principal 
and interest according to the agreement of Ihe parties (a). 
No formal words are necessary to constitute a usufruc- 
tuary mortgage, although in this, as in other cases, inarti- 
ficially drawn instruments not seldom give rise to much 
useless litigation (6). In one case, in which a sum of 
money being advanced, the person making the advance 
was put into the receipt of the rents and profits of 
certain land belonging to the debtor, it was contended 
that the transaction was not a mortgage, but a mere license 
to the creditor to receive the rents which might be 
revoked at any time by the debtor. The Court, however, 
held otherwise, and directed the creditor to render an 
account of his receipts as mortgagee in possession. (Khu- 
sul Rai v. Jankee Dass, II All. H. C. Rep., 9.) Distin- 
guish Girdhari v. CoUis,Vlil Suth. W. R., 497. 

A very familiar kind of usufructuary mortgage is one in Examples 
which the profits are enjoyed by the creditor in lieu of of usufruc- 
interest, the debtor being entitled at any time to redeem mortage, 
the property on payment of the principal. It closely 
resembles a Welsh mortgage in its incidents. Another form 

(a) Where the deed is silent as to interest, there being only a coven- 
ant to reconvey on payment of the principal, the presumption is that 
the profits are to be received in lieu of interest. (Bunwaree v. Mahom- 
med, 2 Hay, 150.) 

(J) For instances, see Deputy Commissioner of Rae BareUi v. Rampal 
Singh (I. L. R., XI Calc., 237); Oanga SaJial v. Luchman Sinffh (I. L. 
R., VIII All., 194) ; Buxant v. Tapeswari (I. L. R.. Ill All., 1). 



272 LAW OF MORTGAGE. 

LECTURE of usufructuary mortgage is that in which the creditor is let 
VIt into possession on the understanding that he is to enjoy 
the usufruct till the whole debt is gradually liquidated. 
This kind of security resembles the vivum vadium of the 
English law, a form of mortgage which, although once 
common, has now fallen into disuse in England. The mort- 
gagor, however, instead of mortgaging his whole estate, 
may mortgage it for a term of years, and there is one kind 
Zuripesh- of usufructuary mortgage by means of a lease, known as a 
gee- zuripeshgee, which forms a class by itself, and deserves 

careful consideration. I shall explain hereafter the origin 
and nature of this remarkable class of usufructuary mort- 
gages, which possesses a history of its own very interesting 
to the student of law. But before I do so, I wish to point 
out that it is not always easy to say whether a transac- 
tion is to be viewed as a mortgage, or simply as a lease. 
I can only ask you to consult the cases on the point, and 
the only rule that can be safely extracted from them is, 
that the intention of the parties must be looked into, and 
that when " once you get a debt with the security of land 
for its repayment, then the arrangement is a mortgage by 
whatever name it is called." In the case of Masuk Amin 
Suzzada v. Marem Reddy (VIII Mad. H. C. Rep., 34), where, 
by the terms of the arrangement, a pending suit was compro- 
mised and the payment of a balance, ascertained to be due, 
was secured by the creditor being allowed to occupy the laud 
Distinction f or fifty-five years at a fixed rent, of which, after deduction 
leasTami of a certain sum for the maintenance of the debtor, the rest 
mortgage, was to be applied to the gradual reduction of the debt, which 
it was calculated would be satisfied in full in fifty-five years, 
the Court held that the transaction was a mortgage, and that 
the parties in providing for the gradual liquidation of the 
debt did not intend toput an end to the relation of debtor and 
creditor, and that, upon a true construction of the document, 
it created only a mortgage-security. Now, compare the above 
case with the case of Baboo Koivar Sing v. Dullun Amrit 
Koer (S. D., 1857, p. 1232), in which there was a lease for 
twelve years, the lessee advancing a certain sum of money 
to the lessor, and it being provided that the lessor 
should be entitled to re-enter on the expiration of the term, 
the lessee taking his chance of good and bad seasons. It 
was argued that the transaction was in substance a mortgage, 
and that the lessee was bound to account as mortgagee 
in possession. The contention, however, was overruled. 



REDEMPTION. 273 

The Court, in giving judgment, observed : " The point to LECTDBE 
consider is, whether there was a fair and reasonable pros- vn - 
pect of risk to the debt itself in what the banker (mort- 
gagee) undertook ; and if so, no question of usury can arise 
out of it, and for the same reason the possession of the 
lessee cannot be regarded as that of a mortgagee. ..... 

We think that the deed of Bhurun ijara before us is, in 
fact, an absolute sale of a lease for a fixed period to which 
the rules common to mortgage transactions cannot be 
applied, as the extinction of the original debt is not solely 
dependent on the receipt of adequate profits, but on pro- 
fits, whatever they may be, during the continuance of the 
lease. Should they fail, the debt is neither realizable 
from, nor secured by, any other resources. This is no 
device but a substantial risk, entitling the lender to any 
benefit from the bargain." (Cf. Perlathail v. Mankudi, 
I. L. R., IV Mad., 113, where it was held that the Madras Madras 
Regulations regarding interest do not apply to an illadwara 
mortgage which secures to the mortgagee the use and 
occupation of the land for a long term, and amounts 
to a lease of the property for the period agreed upon.) 
In a recent case (Satrucherla v. Vairicherla, I. L. R., 
II Mad., 314), the Court said: " Where a day is fixed for 
the payment of a debt and nothing more appears, the 
presumption is that the date is fixed for the convenience 
of the debtor ; and that he may repay the debt at an 
earlier period, and, in like manner, where the mortgage is 
created as a mere security for the sole purpose of ensur- 
ing the payment of the debt at a certain date, we are not 
prepared to say that the debtor may not discharge the 
debt and put an end to the security at an earlier date, but 
where the continuance of the enjoyment of the mortgaged 
property for a prescribed period forms a material part of the 
contract, it would be inequitable to deprive the mortgagee of 
this right on the mere ground that the contract was one 
of mortgage. Where parties agree that possession of the 
property shall be transferred to a mortgagee for a certain 
term, it may be inferred that they intended that redemption 
should be postponed until the end of the term ; but the 
creation of a term is by no means conclusive on this 
point. It may be apparent from the express terms of the 
other conditions of the contract, or by implication, that the 
parties intended that redemption should be allowed at 
an earlier period, as, for instance, when the debt had been 
B. B. G., M. \8 



274 LAW OF MORTGAGE. 

LECTURE discharged in a manner contemplated by the parties, and the 
VII. purpose for which the term had been created thus satisfied, 
and this is apparently the ground on which the decision in 
Dorappa v. Kundukuri proceeded. In each case, then, 
the Court must look to the language of the contract to 
ascertain whether the parties intended that redemption 
should take place only at the end of the term, or at an}" 
earlier period at the option of the mortgagor. 

" The lower Appellate Court has found that in this case 
the parties intended that the mortgagee should remain 
in possession until the end of the term, and we are not 
prepared to hold that, in coming to that conclusion, it has 
misconstrued the contract. Not only is a term created, 
but it is apparent that the parties contemplated the dis- 
charge of the debt and interest in the manner expressed in 
the deed, and in no other manner. 

" There is no agreement for the payment of interest at an 
annual rate ; but the parties have agreed that for the term 
a lump sum, equal to the principal, shall be accepted as 
interest, and that a small balance of rent shall then be 
paid, thus contemplating and providing for a settlement 
at the end of the term. Taking that net annual usufruct 
at a fixed sum, a term of years is created, during which the 
debt and interest are to be liquidated by that usufruct, the 
risk of seasons and the payment of quit-rent being under- 
taken by the mortgagee. Hence it is only reasonable to 
conclude that the basis of the contract was the enjoyment 
of the mortgaged property by the mortgagee for the period 
stipulated." (Cf. Dorappa v. Kundukuri, III Mad. H. C. 
Rep., 363). 

Usufructu- it i s sometimes said that where the principal is risked, 
gages for the transaction cannot be regarded as other than a lease, 
terms of This, however, is by no means generally true, and there 
may be usufructuary mortgages for terms of years, although 
the parties may expressly covenant that the creditor shall 
have no claim against the debtor, either for principal or 
for interest, after the expiration of the prescribed period. 
It would be impossible to say that the principal was not 
risked in such cases, but there are several instances in our 
books, in which such transactions have been regarded as 
mortgages redeemable on the usual terms. 

lability 1 I fc would seem that in a pure usufructuary mortgage 
of mort- where the mortgagee takes possession of the estate, on the 
gagor. understanding that he shall repay himself out of the rents 



MORTGAGORS LIABILITY. 275 

and profits, the mortgagor undertakes no personal liability, LECTURE 
and the mortgagee must, therefore, look exclusively to the vn - 
land for the repayment of the debt. In the case of Thaku 
Beebee (S. D. A., 1850, p. 44), which has since been followed, 
the Sudder Dewany of Calcutta held that, in the absence 
of any covenant, the mortgagor cannot be sued personally (c). 
A doubt, however, has been thrown upon this doctrine by 
the observations of thePrivy Council in the case ofJugjewan 
Dass v. Ramdass Brijbhukun Dass (II Moore Ind. App., 
487 ; VI Suth. W. R., P. C., 11). In that case the mortgage- 
deed contained a clause that the mortgagee should continue 
to enjoy and appropriate the annual produce till the whole 
debt was liquidated. Their Lordships observed that the 
mortgagee would have a full right to recover his/lebt by 
reason of the mortgage ; and that the clause in question 
was merely a power for the mortgagee to satisfy himself just 
as an English mortgagee may by taking possession of the 
rents and profits. The case, however, can hardly be regarded 
as an authority for the proposition, that in every pure 
usufructuary mortgage, the mortgagor incurs a personal 
obligation to repay the debt. There is a distinction be- 
tween an English mortgage, with a power reserved to the 
mortgagee to enter upon possession and satisfy himself out 
of the rents and profits, and a usufructuary mortgage in 
this country where there is no covenant by the mortgagor 
for the repayment of the loan. I have already had occa- 
sion to point out that in India there is no implied personal 
obligation in a mortgage by conditional sale, and the same 
distinction would also seem to hold good in the case of usu- 
fructuary mortgages. I need, however, hardly point out 
that the mortgagor may expressly agree to be personally 
responsible, and it would, no doubt, be prudent for the 
mortgagee to insist upon the insertion of such a covenant by 
the mortgagor in the deed. (Munnolal v. Reetbhoobun, 
VI Suth. W. R, 283.) 

The mortgagor, however, is bound to deliver over pos- Mortgagor 
session of the property to the mortgagee, and to secure jjg;* 
his quiet possession. If, therefore, the mortgagor refuse, possession, 
or be unable, to put the mortgagee in possession of the 
mortgaged property, the mortgagee may sue him at once 
for the recovery of his money. (Rajah Odit Perkash Singh 

(c) See, in passing, Pohpee v. Cheda, N. W. P., 1848, p. 211 ; Behari 
v. Phekoo, I Macnaghten's Sel. Rep., 119. Of course, the rule does not 
hold good if the profits are to be taken in lieu of interest. 



276 LAW OF MORTGAGE. 

LECTURE v. Martindell, IV Moore Ind. App., 444 ; Vayalil v. Udaya, 
VII. II Mad. H. C. Rep., 315, N. W. P., I860, p. 280; S. D. A., 

1852, p. 193 ; S. D. A., 1853, p. 59 ; S. D. A., 1858, p. 306 ; S. 

D. A., 1859, p. 58 ; S. D. A., 1859, p. 322 ; S. D. A., 1856, 
p. 849 (d). The action, however, would not, perhaps, strictty 
speaking, be an action for money lent, but for compensation, in 
estimating which, however, the principal mortgage-money 
with interest at the rate specified in the contract of mortgage 
may fairly be taken as a reasonable guide. (Mohesh Singh v. 
Ohanhorja, I. L. R., IV All., 245 ; Sheo Narayan v. Jai 
Qdbind, I. L. R., IV All., 281.) Similarly, if the mortgagee 
should, before the debt has been liquidated, be disturbed in 
his possession by the mortgagor, or persons claiming under 
a paramount title, the mortgagee is not bound to bring a 
suit for possession, but may sue for the balance due to him, 
and the mortgagor will be personally directed to pay it. 
(N. W. P., Vol. XI, 115 ; N. W. P., Vol. VIII, 286 ; Balaji 
v. Dagi, Bom. P. J., 1884, p. 59; S. D. A., 1859, p. 1181.) 
Right In connection with this topic I may mention that the 

usu*ructu- right created by a usufructuary mortgage is a real right, 
ary mort- and that, although the mortgage-deed may contain a cove- 
i\ S ht areal nan t f r the repayment of the money by the mortgagor 
in the event of the eviction of the mortgagee, the mort- 
gagee is not bound to sue for the money, but may maintain 
ejectment, his right to possession as mortgagee not being 
inconsistent with his right to bring an action against the 
mortgagor for the mortgage-money. It should seem that 
if the mortgagee is kept out of possession wrongfully 
by the mortgagor, he may bring his action for posses- 
sion, even though the term for which the mortgage 
was created has expired, as the mortgagor cannot take 
advantage of his own wrongful conduct. (Har Sahai 
v. Chuni Kuar, I. L. R., IV All., 14.) It is important 
to observe that though the mortgagor is bound to de- 
liver over the mortgaged property to the mortgagee, 
and to secure his quiet possession as against all paramount 
titles, he is not bound by the wrongful acts of third 

(d) Compare Baghelin v. Matliura, I. L. R., IV All., 430, where a 
claim for interest was allowed, as the mortgagee had been prevented 
from taking possession. But where a higher rate of interest was stipu- 
lated to be paid in the event of the mortgagee not being able to obtain 
possession of the mortgaged property, the Court held that the mort- 
gagee had, by abstaining from taking possession, waived his right to 
such higher interest, (ffanga Sahai v. Lachman Singh. I. L, R., VIII 
All., 194.) 



ZUltlPESHGEE LEASES. 277 

persons. His position in fact is analogous to that of a LECTURE 
lessor in an ordinary lease. [Jhabbu Ham v. Girdhari vn - 
Singh, I. L. R., VI All., 298. Distinguish Gyaram v. 
Baroda, XX Suth. W. R, 484 (e).] In one case, however, 
where the mortgagor took no steps to protect his title 
against an execution -purchaser under a decree against a 
third person beyond putting in a claim, which was unsuc- 
cessful, he was held personally liable for the mortgage-debt. 
(Perlad Chandi v. Ghondi Charan, S. D. A., 1853, p. 575. 
Cf. Anund v. Subul, S. D. A., 1857, p. 1195.) The decision 
seems to be based on the duty of the mortgagor to defend 
his title to the mortgaged premises, or to enable the mort- 
gagee to do so, if he is in possession of the property. 

I will now proceed to treat of zuripeshgee leases. A Zuripesh- 
zuripeshgee lease, or a lease for a consideration, is in form g< 
a lease by the debtor to his creditor on a fixed rent reserv- 
ed by the lease, which is generally a little over the amount 
of interest payable by the debtor. The excess is paid to 
the debtor, and is called huq aziree, the rest being retained 
by the creditor in discharge of the interest. The lease is 
generally for the term during which the loan is to remain 
out at interest, although there is usually a provision 
to the effect that, if the loan is not repaid on the 
appointed day, the lease is to continue for such further 
period as the debt may remain unpaid, on the same condi- 
tions (/). Thus, suppose Us. 10,000 are lent at 6 per cent. 
repayable in five years ; the interest on the whole sum 
would be Us. 600 per annum ; the debtor gives a lease of his 
property for five years at a rent, say of Rs. 650 per annum, 
the Rs. 50 representing the huq aziree, and the Rs. 600 
the interest which the creditor retains under the terms of 
the agreement between the parties. The excess, however, 



(e) If, however, the mortgagee sues for his money, he may be pre- 
cluded from enforcing his mortgage in respect of any portion of the 
mortgaged premises. (Issur Chunder v.Eenaram, XIV Suth. W.R., 463.) 

(/) In Gouree Shunker v. Bhoolee Pershad (XVII Suth. W. R.,211), 
where no fresh term was created, it was held that the words in a zuri- 
peshgee lease, " after the expiry of the term, it will be competent to me 
(the mortgagor), in the month of Jeit in any year I can, to pay the znri- 
peshgee and cancel the lease," did no more than bar the mortgagors 
re-entering in the middle of any year, in the event of the mortgagee's 
occupation continuing after the expiry of the lease, owing to the mort- 
gagor's default to pay off the loan, and that it contained no undertaking 
. by the mortgagee to hold on until it suited the mortgagor to pay him 
off 



278 



LAW OF MORTGAGE. 



zuripesh- 
gee leases. 



LECTURE instead of being paid to the mortgagor is not uufrequently 
7 11 ' applied to the gradual reduction of the principal (</). 

History of I have already said that zuripeshgee leases have a history 
of their own. They were originally invented to evade 
the laws against usury, which continued in the Indian 
Statute Book from 1793 down to a very recent period, 
when they were repealed by Act XXVIII of 1855. It is 
not necessary to dwell at any length on the usury laws, 
but as they moulded the law of securities on the principles 
introduced by the Regulations, and as cases sometimes still 
occur, in which the old law has to be applied, I think it 
necessary to draw your attention to some of the leading 
provisions on the subject. Regulation XV of 1793, by 

(<?) A zuripeshgee is nob unfrequently merely a mortgage of the 
rents and profits for the interest due to the mortgagee. (Nundo Lai v. 
Mussamat Kulleana Suttee, Marshal, 209.) It is also necessary to bear in 
mind that a zuripeshgee lease can, in one sense, be regarded as a mort- 
gage only when the right of redemption is reserved to the lessor express- 
ly or by implication. (6fojml v. Desai, I. L. R., VI Bom. .674, distinguish 
Dorappa, v. KunduJturi, III Mad. H. C. Rep., 363. See also S. D. A., 
1857, p. 1232 ; S. D. A., 1859, p. 977 ; N. W. P., 1853, p. 356 ; S. D. A., 
1855, p. 481 ; S. D. A., 1857, p. 1232.) In some cases, it may be 
merely a lease for a term, a sum of money being advanced by the 
lessee as security for the rent to be repaid by the lessor on the 
expiry of the term. In other cases, and this happens most frequently, 
it is created as a lease by way of mortgage to secure a loan advanced to 
the proprietor. The observations of the Madras High Court on Kanams 
are exactly applicable to zuripeshgee leases on this side of India. Rent 
is payable in the case of every Kanam, but all Kauams partake also, to a 
certain extent, of the incidents of a usufructuary mortgage. The mort- 
gagee in all such holdings is assumed to be able to derive from the lands 
placed in his possession enough to pay the interest, at least of the money 
advanced. The discharge of the principal is not immediately contemplat- 
ed. The holder of the Kanam, therefore, pays himself the interest, and 
also pays the Government tax, either directly or through the landlord. 
The overplus or a certain fixed amount in grain or money, is paid to the 
landlord. If, when viewed scientifically, it cannot be wholly regarded 
as a mortgage, it certainly cannot be wholly regarded as a lease, as un- 
doubtedly the land enures as security, if not for the principal, at least for 
the interest of the loan advanced. (Niellaya v. Vada, I. L. R., Ill All., 
382 ; cf. Kamala Naicken v. Pltchacootychctty, X Moore, Ind. App., 386 ; 
Basant Lall v. Tapesliri JRai, I. L. R., Ill All., 4.) On the question, 
whether a transaction amounts to a lease or to a mortgage, or whether 
it partakes of the character of both, the following cases may be usefully 
consulted : Rutton v. Greedharee, VIII Suth. W. R., 310 ; Puriag v. 
Fekoo, XXX Suth. W. R., 160 ; Ishan v. Sliujan, VII Ben. L. Rep., 14 ; 
S. C. XV Suth. W. R,, 331 ; Jowahur v. Sultan, XII Suth. W. R., 
214; Sheogolam v. Roy Dinkur, XII Suth. W. R., 215 ; Ex-parte Hill, 
I. L. R., VIII Calc., 254 ; Vanneri v. Patanattil, II Mad. H. C. Rep., 
382 ; Mayllaraya v. Subaraya, I Mad. H. C. Rep., 81 ; Sctrucherla v. 
Vairicherla, I. L. R., II Mad., 314 ; Perlathail v. Mankude, I. L. R., IV 
Mad., 113; Kishto v. Sujraj, 2 Hay, 159; distinguish Tippayya v, 
Venkata, I. L. R., VI Mad., 74 ; Mahtab v. Collector of Shahqjaiipu-r, 
I. L. R., V All., 419 ; Abdulbhari v. KasM, I. L. R., XI Bom., 462. 



ACCOUNTS. 279 

which the maximum rate of interest was limited to twelve LECTCRE 
per cent, in the Presidency of Bengal (/i), after enact- vn - 
ing in the 10th section, that all mortgages are to be 
considered as virtually and in effect cancelled and re- 
deemed, whenever the principal sum, with the simple in- 
terest due upon it, not exceeding twelve per cent., shall have 
been realized from the usufruct of the mortgaged property, 
provides in the next section for the adjustment of the 
accounts in the case of mortgages specified in section 10 : 
" Where the mortgagee shall have had the usufruct of the 
mortgaged property, the mortgagee is to be required to 
deliver in the accounts of his gross receipts from the pro- 
perty mortgaged, and also of his expenditure for the man- 
agement or preservation of it. The mortgagee is to swear, 
or (if he be of the description of persons whom the Courts 
are empowered to exempt from taking oaths) to subscribe 
a solemn declaration, that the accounts which he may 
deliver in are true and authentic. The mortgagor is to be 
permitted to examine the accounts, and after hearing any 
objections he may have to offer, or any evidence that either 
party may have to adduce respecting them, the Court is 
to adjust the account." 

You will observe that this enactment rendered it extremely The usury 
difficult for the mortgagee to realize more than twelve per 8< 
cent, on the principal money. If he entered upon posses- 
sion, he was liable to account for the rents and profits, and 
anything received in excess of the rate of interest sanc- 
tioned by the law was applied to the reduction of the 
principal. (Sainar All v. Karimullali, I. L. R., VIII All., 
402.) Mortgagees, therefore, hit upon the expedient of 
entering upon possession, not as mortgagees, but as lessees 
at a fixed rent. The lease was sometimes taken in the 
name of a third person, but the object in either case was 
the same, to evade the liability which the Regulations im- 
posed upon the mortgagee in possession. Such a transparent 
device could not, however, be sanctioned by our Courts of 
Justice, and zuripeshgee leases were regarded only as mort- 
gages, and the mortgagee was not permitted to use them as a 
shield against the claim of the mortgagor for an account. 
The rule was not relaxed even when the rent reserved by 
the lease was shown to be a fair rent. In the case of 
Hanuman Persad Pandey, in which the mortgagee insisted 

(70 As to laws regarding usury afT one time in force in the different 
Presidencies, see Macpheraou oil Mortgage, p. H9, note. 



280 



LAW OF MORTGAGE. 



Hanuman 
Persad 
Pandey's 
case. 



LECTURE that he was in possession only as lessee, and was not liable 
vn - to account for the gross proceeds, the rent reserved on the 
lease not being shown to be unfair, and it not being sug- 
gested that there was any attempt to evade the usury laws, 
Lord Justice Knight Bruce, in giving the judgment of the 
Privy Council, observed : " One point remains to be con- 
sidered, namel} r , whether, in taking the account between 
these parties, the defendant is to be charged as mortgagee 
in possession with the actual rents and profits, or only with 
the rent fixed by the pottah. It is said for the appellant 
that the Sudder Dewany Adawlut did not set aside the 
pottah. In terms they certainly did not. But their Lord- 
ships think that it was part of one mortgage-security, con- 
sisting of several instruments of equal date with the mort- 
gage-bond ; and that it was intended to create, not a dis- 
tinct estate, but only a security for the mortgage-mone} 7 . 
Mr. Palmer contended that a stipulation, such as this 
pottah evidences, may stand in India between mortgagor 
and mortgagee, and that the Regulations as to interest do 
not touch such a case. The Regulations provide for the 
case of an evasion of the law as to interest by invalidating 
the mortgage-security and forfeiting the claim of the mort- 
gagee to the principal and interest ; but Mr. Palmer con- 
tends that where there is no such evasion, and a bond fide 
and fair rent is fixed upon as representing communibus 
annis, the rents and profits of the estate, the Court ought 
to stand on that agreement of the parties, and not to direct 
the taking of the accounts between mortgagor and mort- 
gagee on any other basis. It is certainly possible that by 
reason of the provision that the rent shall be a fixed one, 
notwithstanding losses and casualties, the mortgagee might 
be a loser, in his character of lessee, on an account calculat- 
ed on this basis ; but notwithstanding that contingency, 
their Lordships think that, as it was not meant that the 
principal should be risked, it was virtually a provision to 
exclude an account of the rents and profits, and that the 
decree of the Sudder Dewany Adawlut, directing an 
account of the actual rents and profits, therefore proceeds 
on the right principle, and it is in accordance with the 
true nature of the security and the spirit of the Regula- 
tions. 

" In the case of Roy Juswant Lall v. Sree Kishen Lall 
(XIV S. D. A., 1852, p. 577), the Court seems to have thought 
that, where a mortgage lease was granted, and whilst the 



USUKY LAWS. 281 

term was running, the mortgage account could not be LECTURE 
taken; but it appears from that case that, in former deci- vn - 

sions of the Court, not reported, where the lease had expir- 

ed, the Court directed the account to be taken on the ordi- 
nary footing of the receipts of rents and profits of the mort- 
gaged estate. Their Lordships think that, under the 
Regulations, unless the principal is meant to be risked, and 
is put in risk, the estate created as part of the mortgage- 
security, whatever be its form or duration, can be viewed 
only as a security for a mortgage-debt, and must be restor- 
ed when the debt, interest, and costs are satisfied by the 
receipts." 

It followed, therefore, that not only could the mortgage Right of 
be redeemed before the end of the term, but that the 'rent r . edem P- 
reserved on the lease could not be taken as settling before- tlon ' 
hand the annual amount with which the mortgagee was 
to be chargeable in account. The arrangement might be 
in every respect a fair one, but our Courts, in their anxietv 
to protect the debtor from usurious contracts, refused to 
give effect to such an agreement. A zuripeshgee lease, 
in fact, is nothing but a mortgage, and though a lease like 
this in form may be for so many years, it may at any time 
be cancelled on the advance being proved to have been 
discharged with interest from the usufruct, or on the money 
being paid in cash. (Pultun v. Reshal, I Suth. W. R., 7 ; 
Nundlall v. Baluk, II Agra H. C. Rep., 122.) 

The position, however, of the usufructuary mortgagee Position 
has been greatly modified by the repeal of the usury laws, f"*/'*^ 11 " 
and I shall, therefore, ask you carefully to contrast the rights fructuary 
and liabilities of the usufructuary mortgagee as they stood (^"f* 8 " 6 
before the repeal of the usury laws, and as they stand at repeal of 
the present day. usur y Iaw> - 

I have already stated that down to the year 1855, a 
usufructuary mortgage, whatever might be the terms of 
the contract between the parties, came to an end by virtue 
of the enactment contained in Section 9 of Regulation XV 
of 1793, as soon as the principal, together with interest at 
twelve per cent., if no lower rate should have been agreed 
upon between the parties, was realized from the usufruct 
of the mortgaged property, or otherwise liquidated by the 
mortgagor. The mortgagor, therefore, might redeem the 
property at any time, and the Court was bound to allow 
him to do so without any regard to the period mentioned 
in the mortgage. There might, perhaps, be good reasons for 



282 LAW OF MORTGAGE. 

LECTUBE enacting that the mortgage should be cancelled as soon as 
YI1 - the money was realized from the usufruct, but it is difficult 
to see why the mortgagee should be compelled to be paid 
off by the mortgagor before the appointed time. There is, 
perhaps, no system of law which guards the rights of the 
mortgagor with greater jealousy than the English, and yet 
the Court of Chancery, in the absence of any fraud or im- 
proper dealing, will not set aside an agreement, postponing 
the equity of redemption to a long deferred day, and in 
one case, the Court refused to relieve the mortgagor, even 
though he offered to pay the whole of the interest receiva- 
ble by the mortgagee in advance. [Brown v. Cole, XIV L. J. 
N. S. Ch., 167. See also Burrowes v. Molloy, II Jo. and 
Lat, 521 (0-] 

Ri <f ht f i n ^ ne mol 'fco a o or > therefore, under the Regulations, had 
ofmon- the right to redeem at any time on payment of the 
yagor. money due, either on account of principal, or interest, or 
both, and it was no answer to such a suit that the term for 
which the mortgage had been granted had not expired, or 
that the money had not been realized from the usufruct. 
Position of The position of the zuripeshgeedar, perhaps, deserves 
geedar Sh ~ a c l ser examination. I have already called your attention 
to the light in which zuripeshgee leases were always re- 
garded by our Courts. They were not regarded as mere 
leases, and could not therefore be set up as a defence in 
an action by the mortgagor for possession instituted before 
the expiration of the term. It is true that the decisions 
of the Sudder Dewany Adawlut of Calcutta at one time 
showed a considerable fluctuation of opinion, but all the 
more recent authorities are in favor of the view that a 
zuripeshgee, before the repeal of the usury laws, might 
be redeemed, even before the expiration of the term. 
(Pungian Singh v. Amina Khatun, VI Suth. W. R., 6 ; S. 
D. A., 1860, p. 174 ; S. D. A., 1852, pp. 280, 304.) 
Usufmctu- I will now discuss the nature of usufructuary mortgages 
ary mort- created after the repeal of the usury laws. The utmost 
fep^Ti of ter latitude is now given to the parties to contract in any 
usury manner they choose, and the restrictions, which the Regu- 
lations imposed on the creditor, have been wholly with- 
drawn. While the usury laws were in force, the mort- 
gagee was bound to account for the gross profits, allowance 

(i) There may, however, be a proviso enabling the mortgagor to 
redeem on a certain day or on payment before or after it. 
v. Tint/cy, XXXIV L. J. Oh., 13.) 



REDEMPTION. 283 

being only made for necessary outlay and expenses of col- LKCTUBK 
lection, and the mortgagor could not deprive himself of V11 ' 
this right even by contract. Since the repeal, however, 
of those laws, the mortgagor and mortgagee may make 
any contract they please, and the mortgagor may by con- 
tract deprive himself of the right to call for an account of 
the rents actually received by the mortgagee out of the 
estate. In the case of Munnoo Lall v. Eeet Bhoobun Sinqh 
(VI Suth. W. R, 284), the Court observed : " With regard 
to the first part of the contention that a mortgagee in 
possession is bound in every case to account for the profits, 
and that a mortgagor cannot by contract deprive himself 
of his right, it is no doubt true that, while the usury laws 
were in force, a restriction in this respect did certain! v 
exist. But this prohibition on the free power of the par- 
ties to contract as they please was solely a consequence 
of the usury laws then in force ; and on the abolition of 
those laws, the restriction in question fell with them. Bv 
Section 4 of Act XXVIII of 1855, it is expressly enacted 
that an agreement that the use of usufruct of any proper- 
ty shall be allowed in lieu of interest, shall be binding 
upon the parties. We are of opinion that a mortgagor and 
mortgagee are now at liberty to make what contract they 
please with reference to the profits of the mortgaged 
estate." This case is, therefore, an authority that tlie 
mortgagor is at liberty to contract in any manner he 
pleases, and will not be relieved from any covenant bind- 
ing him not to ask for an account of the actual profits. A 
zuripeshgeedar, therefore, is, as the law now stands, bound 
to account, not for the profits actually received by him out 
of the estate, but only for the rent reserved on the lease. 

The question has arisen whether a zuripeshgee, created Right of 
since the repeal of the usury laws, may be redeemed before [|;f n emp ~ 
the expiration of the term specified in the deed ; and the 
reported cases on the point show the inclination of our 
Courts to treat zuripeshgees as ordinary leases, which can- 
not be put an end to before the expiration of the term 
for which they have been created (j). Zuripeshgee leases, 

(.;' ) Of course where no term is fixed, a usufructuary mortgage may be 
redeemed at any time, and the mortgagee will be entitled to re-enter 
on the property, if on taking an account it appears that the principal 
and interest have been satisfied. (Doul Narayan v. Riinjlt Singh, I Cal. 
L. Rep., 256.) It is necessary to observe that the transaction in this 
case bore date the 18th of July 1845, but it seems to have been decided 
on the assumption that it was unaffected by the usury laws. See also 
Venneri v. Patanattil, II Mad. H. C.Rep., 382. 



284 LAW OF MORTGAGE. 

however, are seldom intended to create a distinct estate, but 
are only effected as security for the mortgage-money. In 
this view, it would perhaps be difficult to treat them as 
ordinary leases. Be that, however, as it may, there is 
little doubt that a zuripeshgee, created since the repeal 
of the usury laws, cannot be redeemed before the term for 
which it has been executed has expired (/j). (Khajeh Lootf 
AH v. Goozraz Thakoor, XI Suth. W. 11., 408 ; Soorjun 
Choivdry v. Imam Bandee Begum, XII Suth. W. R., 527 ; 
Sreemunt Dutt v. Krishna Nath Dutt, XXV Suth. W. R., 10 ; 
Joomna Pershad v. Joyaram, II Gal. L. Rep., 26 ; Khojah 
Lutif Ali v. Goojraj, XII Suth. W. R., 528, note ; Chunder 
Coomar v. Isiuur Chunder, XIV Suth. W. R., 455.) It 
is perfectly valid as an agreement settling beforehand the 
annual amounts with which the mortgagee would be charge- 
able in account, and as the equity of redemption may be 
postponed to any day that the parties may agree upon, I do 
not think that the Court will permit the mortgagor to pay off 
the mortgage-money and re-enter upon the estate before the 
expiration of the term for which the zuripeshgee has been 
created, that being the period fixed for the redemption of 
the mortgage. It may, no doubt, be suggested that, in 
the absence of any express stipulation, postponing the 
right of redemption, the mortgagor ought to be permitted 
to redeem; but, except in very badly-drawn, instruments, 
there is sufficient indication of the intention of the parties, 
that the money shall be repaid on the determination of 
the term for which the zuripeshgee is effected, atid as in 
the case of an ordinary creditor, the mortgagee has the 
right to refuse payment at an earlier date. It may, perhaps, 
strike some of you, that it is of no consequence whether 
you treat the zuripeshgee as a lease on a reserved rent, 
or as an agreement settling the basis on which the account 
between the parties are to be taken. This, however, is 
by no means so, and the distinction is an important one, 
as I shall endeavour to show in the next lecture. In either 
view, however, a zuripeshgee is valid since the repeal of 

(&) The question, however, whether the transaction is a mere lease 
or a mortgage may be of considerable importance in cases in which 
limitation is set up as a defence, or in which a transaction is sought to 
be set aside on the ground of its improperly fettering the equity of 
redemption. (Gopal v. Desai, I L. R., VI Bom.. 674 ; Abdul v. Kashi, 
I. L. R., XI Bom., 462.) The question may also arise in connection with 
the provisions of particular statutes, the Registration or Stamp Act, 
for instance. (Ram v. Thacoor, I. L. R,, IV Gale., 6 ; Ex-parte Hill, 
I. L. R., VIII Calc., 254.) 



ZURIPESHGEE. 285 

Regulation XV of 1793, as an engagement excluding an LBCTOBE 
account of the actual profits realized by the mortgagee in VIL 
possession. But it requires a clear expression of intention 
to deprive the mortgagor of his right to redeem. If, there- 
fore, a usufructuary mortgage is made for a definite term, 
but no further term is created, the mortgage may be re- 
deemed at the end of the term. (Kanara v. Ryrappar 
1. L. R., Ill Mad., 213, N. W. P., 1853 ; p. 356.) 

It is necessary to observe that, in the absence of any 
contract to that effect, a usufructuary mortgagee has no 
right either to foreclose or to sell the property comprised Forecio- 
in the mortgage. (Mohesh Sing v. Chanhorju Singh, I. L. 8U . re " nd 
R., IV All., 245 ; Sheo Narayan v. Jai Gobind, I. L. R., IV * 
All., 281 ; Oangaprasad v. Kusagari, I. L. R., I All., 611 ; 
Dulli v. Bahadur, VII All. H. C. Rep., 55.) In a late 
case the Court observed : " Although it is true that these 
leases are treated by the Courts as usufructuary mortgages, 
and that parties to them have, to some extent, the rights 
of mortgagor and mortgagee, it does not follow that in a 
case of this kind the lessee is entitled to have the property 
sold. To do that would be to give him a greater security 
than he has'stipulated for. All that has been held by the 
Courts in regard to transactions of this kind, as I under- 
stand it, is, that the parties ought to be considered, not 
simply as lessor and lessee, but as mortgagor and mortgagee, 
the lease being granted as a security for repayment of the 
money. This would put the lessor in the position of a 
mortgagor and give him the rights of a mortgagor, and, to 
the extent of the security given, would put the lessee in 
the position of mortgagee with the rights and liabilities at- 
tached to that character. What is now asked for is beyond 
that. We think that the "decision of the lower Appellate 
Court is right, and that the plaintiff is not entitled to the 
decree which he sought in this suit." (Kewal Sahu v. Rash- 
narain Sing, XIII Suth. W. R., 446.) A zuripeshgeedar, to 
whom the property itself is not pledged, has, therefore, a 
very imperfect security. (Cf. Nundolal v. Kullipa, Mar- 
shall, 209; Muyeedannissa v. Dildar Hossein, XX Suth. 
W. R., 178; for cases in which it was held that the 
property itself was mortgaged as security for the debt, see 
Phul Kuar v. Musli Dhur, I. L. R., II All., 527 ; Mun- 
noolal v. Reetbhoobun, VI Suth. W. R., 283, distinguish- 
ing Dulli v. Bahadur, VII All. H. C. Rep., 55. 

It is, perhaps, scarcely necessary to remind you that a 



286 



LAW OF MORTGAGE. 



LECTURE usufructuary mortgagee in possession may not, any more 



VII. 



Redemp- 
tion when 
there are 
several 
mortga- 
gors. 



Redemp- 
tion. 



than a mortgagee in any of the other forms, deny the title of 
the mortgagor to mortgage or to redeem. (Santaji v. Baya- 
ji, Bom. P. J., 1876, p. 70; Chinto v. Lakshman, P. J., 1876, 
p. 28.) As in other kinds of mortgage, one of several mort- 
gagors in a usufructuary mortgage is entitled to redeem the 
whole mortgage, but the rule does not, it seems, apply where 
possession is sought to be recovered on the ground that 
the debt has been satisfied out of the usufruct. In such 
cases the plaintiff can only claim his own share, and the 
extent of it should be determined in the presence of all 
the co-mortgagors. (Fakir Bukush v. Sadat Ali, I. L. R., 
VII All., 376; but see Mirza Ali Reza v. Tarasoondari, II 
Suth. W. R., 150.) The mortgagor who redeems the whole 
estate will be entitled to possession and receipt of the whole 
of the rents, subject to account with his co-mortgagors. 
(Oobind Pershad v. JDwarkanath, XXV Suth. W. R., 259.) 

A usufructuary mortgage may be redeemed within the 
same period as any other mortgage. Before the passing 
of Act XIV of 1859, however, a usufructuary mortgage 
might be redeemed at any time ; but, as the law stands 
at present, the mortgagor must exercise the right of 
redemption within sixty years from the time when the 
right to redeem or to recover possession accrues to the 
mortgagor. The period, however, as I have already had occa- 
sion to observe, may be enlarged by a written acknowledg- 
ment by the mortgagee (I). It must be borne in mind 
that the general article relating to suits for immoveable 
property has no application to an action by a mortgagor 
who has executed a usufructuary mortgage for a term of 
years, seeking to recover possession of the mortgaged pro- 
perty, alleging that the mortgage-debt has been paid off. 
The possession by a mortgagee for a term of years after the 
expiration of the term is not necessarily adverse to the 
mortgagor, and so long as the relation of mortgagor and 
mortgagee exists, the mortgagor has sixty years within 
which to redeem. (Chuda v. Mahant, Bom. P. J., 1883, 
p. 145. Distinguish Gopal v. Desai, I. L. R., VI Bom., 674.) 

There are some other points connected with usufruc- 
tuary mortgages, which, however, will be more con- 
veniently discussed in the next lecture when I come to 
treat of accounting. 

(I) See further on the subject of limitation generally, App. Sta- 
tutes, tit. Limitation. 



LECTURE VIII. 



Liability of mortgagee in possession to account Regulation XV of 1793 
Meaning of " gross receipts" Mortgagee not competent to create middlemen 
Allowance for expenses of collection Practice of our Courts Nature of 
accounts which mortgagee is bound to produce Verification of account* 
Right of mortgagee to interest not exceeding 12 percent. Shah Makhun Loll 
v. Sreekissen Sing Liability of mortgagee since Act XXVIII of 1855 
Zuripeshgee leases Allowance for necessary repairs Improvements how far 

allowed Payment of Government revenue Mode of taking accounts 

Liability of mortgagee after notice of subsequent incumbrance Mortgagor 
not liable to account Mortgagee not a trustee for mortgagor Wassilat 
distinct from usufruct Mortgagee chargeable with occupation rent Suit 
for redemption Practice of the Courts iu Bengal Procedure in such cases 
elsewhere. 

I STATED in the last lecture that the position of the mort- 
gagee in possession has been considerably modified by the 1 0:>!K *~ 
passing of Act XXVIII of 1855. It will, therefore, be 
convenient to deal, in the first place, with mortgages 
governed by Bengal Regulation XV of 1793 (a), and then to 
deal with those which are governed by Act XXVIII of 1855. 

In mortgages created before the repeal of the usury Liability 
laws, the mortgagee, if in possession, is bound to account of mor . l ~ 
for the gross proceeds, allowance, however, being made for poss'essTon 
the " costs of collection and preservation of the estate to nc ~ 
in mortgage," and any contract excluding an account of 
the actual rents and profits, is, as I said in the last lecture, 
as a rule, wholly inoperative. (Hyder Buksh v. Hossein 
Buksh, IVSuth. W. R., 103; Fuzlool Muhman v. Ali- 
kureem, V Suth. W. R., 163 ; Punjum Singh v. Ameena 
Khatoon, VI Suth. "W. R., 6 ; Doorga Debee v. Issur 
Chunder, X Suth. W. R., 367. Distinguish Mahadu v. 
Bhagiratti, Bom. P. J., 1877, p. 169, where the Court held 
that no condition for an account could be engrafted on the 

(a) As to laws regarding usury, afc one time in force in the different 
presidencies, see Macpherson, p. 149, note. I may mention that the 
rule of ditmdiipat is still applied in the Presidency of Bombay, but not 
where, in taking the accounts against the mortgagee in possession, credit 
is given to the mortgagor for the rents and profits as against the prin- 
cipal and interest due to the mortgagee. (NuthuWiai Parrachand v. Mul- 
cliand Hirachand, V Bom. H. C. Rep., 196; Sheobart v. Dliaree, II 
Agra H. C. Rep., Part II, 194 ; Narayan v. Satvaji, IX Bom. H. C. Rep., 
83 ; Hari v. Salambhat, I. L. R., IX Bom., 233.) 



288 LAW OF MORTGAGE. 

LECTURE contract.) And the mere fact that the purchaser of tlie equi- 
VIII. ty o f redemption retained a certain sum for payment to the 
mortgagee as due on the mortgage, would not preclude 
the former from claiming an account. (Ja/ree v. Ounga, 
III Agra H. C. Rep., 91 ; Bibee Suyeedun v. Zuhoor, Suth. 
W. R., 1864, p. 44.) But there may be cases in which 
the mortgagee may relieve himself from the obliga- 
tion ; for instance, when the only sum he is to receive 
beyond the interest allowed by law is an unvarying and 
not a fluctuating amount which the Court, under the circum- 
stances, regards as a fair allowance for the costs of collection. 
(Badri Frosad v. Murali Dhur, I. L. R.,II All., 593.) But an 
agreement to exclude accounting absolutely would not, as I 
have already said, be sustained under the usury laws, nor 
would a mere recital of such an agreement, in the absence 
of a new contract in a document executed after the repeal 
of those laws, affect the right of the mortgagor to call for an 
account. [Mahtabkuar v. The Collector ofShahabad, I. L.R., 
V All., 419 (6).] The duty of the mortgagee is defined in 

Regnia- Section 11 of Bengal Regulation XV of 1793, which says : 

of 'i793. "For the adjustment of the accounts, in the cases of mort- 
gages specified in Section 10, where the mortgagee shall have 
had the usufruct of the mortgaged property, the mortgagee 
is to be required to deliver in the accounts of Ids gross receipts 
from the property mortgaged, and also of his expenditure 
for the management or preservation of it. The mortgagee 
is to swear, or (if he be of the description of persons whom 
the Courts are empowered to exempt from taking oaths) 
to subscribe a solemn declaration, that the accounts which 
he may deliver in are true and authentic." 

laf's case Now, although the section speaks of the gross receipts, 
they must be such as the mortgagor himself could have 
realized before the mortgage, and if he could not by reason 
of an intervening lease call for the account of the collec- 
tions, neither can the mortgagee. The terms of the law 
are not inflexible, and must receive a construction such as 
may suffice to accommodate its provisions to the variable 
and different natures of estates and possession. (Shah 
Makhun Loll v. Sreekissen Sing, XII Moore Ind. App., 157 ; 
XI Suth. W. R., P. C., 19.) The mortgagee, however, 

(Z>) The mode of accounting, except where it is only a device to 
exclude accounting altogether, may, of course, be regulated by the terms 
of the deed. (Ram Pershad v. Kishen, III Agra H. C. Rep., 146; 
lladhalenode v. Kripamoyee, XIV Moore Ind. App., 443. Cf. 451 ; S. D. A., 
1848, p. 649 ; N. W. P., 1855, p. 22.) 



ACCOUNTING. 280 

must not create a middleman between himself and the LKCTVKK 
tenants ; and if he does so, he is not relieved from the respon- Viir - 
sibility of accounting for the gross rents payable by the 
tenants. (S. D. A., 1852, p. 1137 ; S. D. A., 1857, p. 1513.) 
Again, a mortgagee in possession cannot grant a title to 
any one for a period in excess of the duration of his own 
Interest in the estate, and it would seem that, unless the 
tenant of the mortgagee attorns to the mortgagor, the 
latter will not be entitled on redemption to sue the 
former for rent. (Adjoodhya Sing v. Oirdharee, II All. 
H. C. Rep., 199.) In England large leasing powers hare 
been given both to the mortgagor and mortgagee by the 
Conveyancing Act of 1881, but in this country it seems 
that the mortgagee in possession, and the same remark 
applies to the mortgagor, is only entitled to create a tenancy 
from year to year, or in the case of house property, from 
month to month, in the ordinary course of management. 
Formerly in England a mortgagee could not make a valid 
lease without the concurrence of the mortgagor except in 
a case of necessity. (Hungerford v. Clay, 9 Mad. 1 ; Corbett v. 
Plowden, 25 Ch. Div., 678.) Nor was the mortgagor in 
possession clothed with any implied authority to let the 
premises, even from year to year, at a rack rent. (Keech v. 
Hall, and the notes to it, I Smith L. C., 574.) The rule, 
however, would seem to be ;i somewhat inconvenient one, 
but as pointed out by Lord Mansfield, it is not likely to 
work any practical mischief, for where the lease is not a 
beneficial lease, it would be undoubtedly for the interest 
of the mortgagee to continue the tenant. Where the lease 
happens to be a beneficial one, the tenant may always put 
himself in the place of the mortgagor by redeeming the 



mortgage. 



The mortgagee, however, is not an assurer of thecontinua- Grow 
tion of the same rate of profit as the mortgagor was able J^ 
to raise, although he may be liable for the non-receipt of 
profits which he might have received with common care 
and attention. (XII Moore Ind. App., 192-193.) 

In England amoitgagee accounts for rent according to 
the rate at which the premises were let when he took 
possession, unless the contrary is shown by him. (Black- 
lock v. Barnes, Sel. Ca. Ch., 53.) This rule, however, must 
be applied with great caution in this country, where so 
much depends on personal qualities?, and where a change 
of management nnd possession may cause a falling off of 
R. B. G., M. 19 



290 LAW OF MORTGAGE. 

LECTURE receipts ; an estimate of a preceding rental, is not, there- 
VHI' fore, always a proper measure of actual receipts. (XII 
Moore Ind. App. ; 193.)(c) 

The mortgagee is, strictly speaking, liable only for the 

amount actually realized by him, except in cases of fraud 

or wilful neglect of which primd facie evidence must 

be given by the mortgagor. The general rule on the subject 

is that the mortgagee in possession is only accountable 

Mortgagee for what he has received, and is not bound to take any 

v hat d l particular trouble to make the most of another's pro- 

exteut. perty. Choti v. Kalka, VII All. H. C. Rep., 100. (d} 

But, on the other hand, he is bound, as pledgee of the 
estate, to take the same care of it as every prudent owner 
is in the habit of taking of his own property, and he is 
responsible for waste, for the consequence of wilful de- 
fault, and for all loss resulting from negligence amounting to 
a breach of trust ; but the mortgagor cannot lie by 

(<?) I am, however, bound to add that a more stringent rule seems to 
have been acted upon in some of the earlier cases in the reports, and in 
taking the accounts, the mortgagee has been held answerable for the 
rents exhibited in the rent roll of the state in the absence of any satis- 
factory explanation as to the reasons for the non-realization of any 
portion of the rents. In the case of Chobetj Harbons v. Pit.om Singh, the 
Court observed : ; ' The principal Sudder Ameen has correctly made the 
jummabundee, or gross rental, the basis of the account. It is the busi- 
ness of the mortgagee to realize the rents, and he is allowed 10 per cent, 
on the collections, in addition to the legal rate of interest on his debt 
on account of the trouble and responsibility involved in this duty. It is 
only on a special plea that the balance accrued from circumstances 
beyond his control, that he can be allowed to deduct outstanding arrears, 
ordinary balances must be held to be covered by tbe allowance of 10 
per cent, given for the trouble of collecting. No circumstances have 
been alleged by the appellant in this case which can entitle him to have 
the asserted balance of rent thrown out of the account." N. W. P. 
1854, p. 371, cf. Chokey Lallv. Kalian Dass, N. W. P. 1854, p. 159; 
Rajah Heera Singh v. Sahoo Luchmon Dass, S. D. A., N. W. P. 1853, 
p. 564 ; Meer Boonead Ally v. Deendyal, S. D. A., N. W. P. 1854, p. 201 ; 
Syed Wazeer Alee v. Jugmohon Singh, S. D. A., N. W. P. 1854, p. 465 ; 
Khyaleeram v. Ram Dyal, S. D. A., N. W. P. 1855, p. 51 ; Albas 
v. Sahib Alee, S D. A., N. W. P. 1855, p. 355; Runjvet Singh 
v. Musst. Dhookhin Acharaj Koonwar, S. D. A. 1858, p. 1847; Jhiijjo Sahoo 
v. Hurrack Chand Sahoo, S. D. A. 1860, vol. I, p. 639 ; see also Mirza All 
Reza v. Tara Soonderee, 2 W. R., 150. It seems to me, however, that in- 
stead of allowing the mortgagee in account a fixed percentage on the 
collections on account of his trouble and responsibility, that, while on 
the one hand, he ought to be allowed only bis reasonable expenses, he 
should not, on the other hand, be regarded as an insurer of the rents and 
profits of the mortgaged premises for the benefit of the mortgagor. 
For the English law on the subject, see Fisher's Mortgage, 859-860. 

(d) As regards the duty of a mortgagee of a fractional share of an 
estate held in joint tenancy, see Mirza AH Rexd v. Tara Soondori, 
HSuth. W.R., 150. 



ACCOUNTING. 2fU 

without giving notice, and afterwards charge the mort- LcrritE 
gagee with the effect of his own negligence. (II Wh. vni - 

& Tud. L. C., 771, and the cases there cited.) The 

civil law is the same, requiring of the creditor " exact 
diligence" in the custody of the thing pledged; and to 
be as careful in that custody as the average of careful men 
usually are in their own affairs : Inst. lib. Ill, tit. xiv, 4, 
Dig. lib. XIII. tit. vii, 14. And so by the Hindoo Law', 
as expounded by Sir T. Strange (Chap. XII), the creditor 
in possession of the property pledged " will be bound to in- 
demnify his debtor, for any damage it may sustain in his 
hands through want of due care " (Note by Editor to Girjqji 
v. ^esfca^IIBom.H.C.Rep^p. 213; N. W. P. 1852, 436; 
N. W. P. 1854, p. 1) (e). Such being the nature of the obli- 
gation of the mortgagee, it follows that if the security is of a 
wasting nature, and is suffered to deteriorate, the mortgagee 
will be precluded from following other assets (Coote, 1113). 

Similarly the mortgagee of an agricultural holding will Ngl>- 
be liable if he is guilty of gross mismanagement in the gence ' 
cultivation of the land, and a mortgngee in possession of 
cultivable land must cultivate the ordinary crop which it 
is capable of yielding. (Girjoji v. Kesliaorav, II Bom. H. 
C. Rep., 211, the head-note of which is incorrect ; Wragg v. 
DenJtam, II Y. & C., Exe., 117.) 

It seems somewhat doubtful upon the authorities ( I Agra Usnfrnctu- 
H. C. Rep., 281 ; Of N. W. P. 1864, p. 305) whether a usufruc- J5?. ort 
tuary mortgagee can plant trees without the consent of the 
mortgagor, but if he does, he will be liable to account for 
the profits arising from the trees planted by himself on the 
mortgaged land, and he may either be charged with a fair 
occupation rent or with the actual net profits realized by 
him after deducting all outgoings, and allowing a reasonable 
rate of interest on the capital employed in the undertaking. 
(Prabhakar v. Pandurang, XII Bom. H. C. Rep., 88.) 

You will observe that the mortgagee is entitled to the ^ f xp ^ 8C8 
expenses of collection, and a fixed percentage on the gross tion" 
collections is generally allowed to him under that head vary- 
ing from five to ten per cent. In one case, however, the 
Court observed : " No item should be allowed to the mortga- 
gee, which is not either admitted by the mortgagor, or sup- 
ported by evidence of some sort. For instance, neither ten 

(e) Cf . Noyes v. Pollock, 30 Ch. D., 336. where it was held that the 
accounts of the mortgagee are not sufficient if they only show sums 
received in lump from the mortgagee's agent. 



202 LAW OF MORTGAGE. 

LECTURE per cent, nor five per cent, should be allo-vred for collection 
VIII- charges, but only so much as the expenses of collection actu- 
ally amounted to, and if proper vouchers for this are not 
forthcoming, at least some evidence should be adduced 
sufficient to lead to a reasonable estimate of what the 
expenses under this head probably were." (Mukund Loll 
Sukitl v Goluk Chunder Dutt, IX Suth. W. R., 575; cf. Bro- 
jonautlt v. Bhugobutty, I Suth. W. R., 133; Roghonath v. 
Lu-dtiiu, I Agra H. C. Rep., 132.) 

Accounts 1 need hardly observe that the accounts which the 

to be full mortgagee is bound to deliver must be full and complete. 
They must exhibit detailed items of all actual receipts- 
and disbursements, and must be accompanied by all 
vouchers. ID one case in which the mortgagee put in 
certain jurnma-wasil-bakee papers, the Court observed : 
" Jumma-wasil-bakee papers, although they may, and per- 
haps may very strongly and directly, support a mort- 
gagee's account put in under the law (section 3, Regula- 
tion I of 1798), are not and cannot be that account itself. 
That account which the mortgagee by law has to put into 
Court, is not that of his agent or tehsildar, given by the 
latter for his master's (the mortgagee's) information as to 
such agent's collections. The jumma-vvasil-bakee paper, 
however, is this latter only. The account to be put in 
under the law is one to be made, verified, and proved 
by the mortgagee himself in the way before indicated. 
His jurama-wasil-bakee papers, duly attested by those 
who prepared them, or who collected according to them, 
and supported by the receipts of the talookdars or 
ryots, who also may be called to depose to those receipts 
and to what was the real demand, collection, and balance 

LoU's case, of each of their respective tenures may well be adduced 
to support the mortgagee's own account when made and 
put into Court under the law cited. 

" In fact, the account required from the mortgagee is 
one setting forth what he has realized, from what portions 
of the mortgaged property, in what terms or periods, with 
what loss and gain on the several assets, with what neces- 
sary reductions, and what remains then as the net profits 
which can be taken as actual realizations towards liquidat- 
ing the sum due under the mortgaged transactions." (Mohun 
Loll Sukul v. Goluk Chunder Dutt, V Suth. W. R., 276 ; 
cf. Bibee Suyeedunv. Zuhoor, Suth. W. R., 1864, 44 ; Ram- 
kissenv.ShahKundun,Sut\i.W. R., 1864, 177; Ameer- 



ACCOUNTING. 293 

ooddeen v. Ramchand, V Suth. W. R., 53 ; Ramlochan v. LECTURE 
Kunhyalal, VI Suth. W. R., 84 ; Tasaduk v. Beni, XIII vm - 
Cal. L. R., 128 ; N. W. P., 1850, p. 244.) 

It used to be thought at one time that the accounts vrffl- 
must, in every case, be verified by the mortgagee himself, cnrion ol 
and that the terras of the law were inflexible. The Privy " 
Council, however, observed in a late case : " Their 
Lordships think that the language which, like other provi- 
sions of the earlier Regulations, is curt and applied to the 
more common cases, must, to preserve even the spirit of the 
enactment itself, be construed reasonably, as admitting in 
rase of necessity, of some delegation also in the person 
deputed to perform the duty of attesting the accounts. 
If the general manager who did till, and knows all, with 
whom the mortgagors, with that knowledge, contracted, 
whose name is used, whose accounts in one sense they are ; 
and who far more than mere representative knowing nothing 
of their own knowledge of the transactions, satisfies the 
spirit of the law swears to the truth of them, it is such a 
reasonable compliance with the spirit of the law at least, 
that its performance, in a case circumstanced like the pre- 
sent, by a substitute, furnishes no ground whatever for 
suspecting malpractice or designed evasion of the law; 
and with that alone their Lordships are concerned in this 
case, since the mere mode of the verification has no other 
importance in this case than as it raises a case of suspicion 
against the accounts themselves," (Shah Makhum Loll v. 
Sreekishen Singh, XII Moore Ind. App., 157 ; XI Suth. 

W. R., P. C., 25.) 

The necessity for an account, however, does not arise in *tre 
every case. In the case of a usufructuary conditional sale, necessary, 
for instance, the mortgagee is bound to account only when 
the mortgagor has deposited the principal, leaving the 
question of interest to be afterwards settled, or has deposit- 
ed all that he alleges to be due, or asserts that the whole 
of the debt has been liquidated by the usufruct. (Forbes v. 
Ameerunissa, X Moore Ind. App., 340.) The onus is on 
the mortgagor to show that the debt has been discharged 
out of theusufruct. (Mukhum Loll v. Sreekisi&n, XII Moore 
Ind. App., 157 ; Bama Soonduree v. Bama Soonduree, X 
Suth. W. R., 301 ; cf. Kullyan Das v. Sheonundun, XVIII 
Suth. W. R., 65, where the onus is said to be on the 
mortgagor to show that the principal sum has been satis- 
fied, 'and on the mortgagee to show what, if anything, 



294 LAW OF MORTGAGE. 

LEOTUEE is due to him for interest.) (/) If the mortgagee refuse or 
VIII> neglect to deliver in the accounts, the Court must take 
the best evidence available and decide upon it. The 
general presumption will, no doubt, be against the mort- 
gagee, but this would not justify the Court in accepting 
without examination any evidence which may be offered 
by the mortgagor. Presumptions in odium spoliatoris have 
known limits, although it may fairly be doubted if those 
limits have not been overstepped in some of the cases in 
the books. (Shah Makhum Loll v. Sreekishen Singh, XII 
Moore Ind. App., 157 ; XI Suth. W. R., P. C., 25 ; SJiah 
Gholam Nazaf v. Mussamut Emamun, IX Suth. W. R., 
275 ; Mohanlal v. Goluck Chunder, X Moore Ind. App., 
1 ; Hashum v. Ramdhone, VII Suth. W. R., 82 ; Tikaram v. 
Kamiram, Bom. P. J. 1876, 191.) 

Rate of I have already said that in a mortgage, created before 
interest. ^ Q repeal of the usury laws, the mortgagee cannot take 
any higher interest than twelve per cent, on his money. He 
may, no doubt, agree to take less, and such agreement will 
be binding upon him. But he cannot in any case exceed 
the limit fixed by the Regulation. Cases, however, may 
occur in which the interest reserved by the mortgage will 
not be the true measure of the annual stipulated return for 
the loan. A very interesting question on this point arose 
in the case of Shah Makhum Loll v. Sreekishen Singh. The 
interest reserved by the instrument of mortgage was nine 
per cent., but the mortgagor, as part of the transaction, 
executed a lease in favour of the mortgagee, which would 
leave to the mortgagee an annual profit of something more 
than three per cent, on the principal money. The mortgagee 
thus secured to himself a return of something more than 
twelve per cent, on his money. The mortgagor brought a 
suit, not for avoiding the transaction altogether as a 

(/) Ordinarily where there isno question of the satisfaction or discharge 
of the mortgage-debt, on taking the account on a mortgage, it lies 
upon the mortgagee to prove what is due from the mortgagor in res- 
pect of principal and interest. In a mortgage suit, where the defendant 
admitted that he was in possession of the property in dispute as a 
mortgagee under the plaintiff, but refused to put in evidence the 
mortgage-deed, which was insufficiently stamped, it was held that the 
plaintiff was entitled to redeem on paying what was due from him 
on the mortgage, together with the costs of the suit, and that, if the 
mortgagee refused to pay the penalty and put the mortgage-deed in 
evidence, he could only be credited in the account with the sum which 
the plaintiff admitted to be the amount of the principal, and must be 
debited with the income derived from the land, since he. the mortgagee 
had been in possession. (Ganga v. Bayajec, I. L. R., VI Bom., 669.) 



RATE OF INTEREST. 'J5 

device to evade the laws against usury, but for redemp- LBCTUBK 
tion, and contended that, under the Regulation, the mort- VIIJ - 

gagee, while he could not demand more than the rate of 

interest specified in the deed of mortgage, was bound to 
account for the actual collections, and that such account 
could not be excluded by the lease which was only part 
of the mortgage security. The Privy Council, while holding 
that the mortgagor had a right to insist on the mortgagee's 
accounting for the actual collections, were of opinion Ihat 
the latter was entitled to have the bargain performed, so 
far as the law allowed, and that the rate of interest reserv- 
ed by the mortgage was only a part of the annual stipulat- 
ed return for the loan which would not have been grant- 
ed at nine per cent, only, the rate mentioned in the deed of 
mortgage. In giving judgment, their Lordships observed: 
" It is clear that if the mortgagees had been suing the mort- 
gagor on the mortgage-deed for the debt, they could have 
recovered no higher rate of interest than nine per cent., thfj 
contract being in writing and incapable of being varied 
by parol evidence ; but this is by no means decisive of the 
question, for, supposing that the extra profits on the several 
engagement forming one mortgage security had amounted 
only in the whole to three per cent., making a twelve per 
cent, only in all, precisely the same consequence would have 
ensued ; the reserved interest would have been correctly 
viewed as constituting part only of the profit, and as such, 
would have been all that the parties stipulated for as to 
that part of the transaction ; but it would not have mea- 
sured the stipulated return for the loan annually. The 
rules of evidence and the law of estoppel forbid any addi- 
tion to, or variation from, deeds or written contracts. Makhum 
The law, however, furnishes exceptions to its own salu- ^ 
tary protections ; one of which is, when one party for the 
advancement of justice is permitted to remove the blind 
which hides the real transaction, as, for instance, in cases of 
fraud, illegality, and redemption, in such cases the maxim 
applies that a man cannot both affirm and disaffirm the 
same transaction to show its true nature for his own relief, 
and insist on its apparent character to prejudice his adver- 
sary. This principle, so just and reasonable in itself, and 
often expressed in the terms that you cannot both appro- 
bate and reprobate the same transaction, has been applied 
by their Lordships in this Committee to the consideration 
of Indian appeals as one applicable also in the Courts of 



296 



LAW OF MORTGAGE. 



LECTUBE th.it country which are to administer justice according to 
V1IL equity and good conscience. The maxim is founded not 
Maxim. s much on any positive law, as on the broad and univer- 
sally applicable principles of justice. The case of Forbes v. 
Amerunissa Begum (X Moore Ind. App., 356) furnishes 
one instance of this doctrine having been so applied, where 
it is said in the judgment of their Lordships : ' The res- 
pondent cannot both repudiate the obligations of the lease 
and claim the benefit of it.' Unless, therefore, some posi- 
tive law has said that, in cases similar to fche present, the 
written engagement, though not extending to the whole 
profit stipulated, must be adhered to against the defendant, 
though the plaintiff may go beyond it to show the full ex- 
tent of the profit, and so to be relieved from the consequen- 
ces of his actual contract, their Lordships must hold that 
the bargain disclosed should be performed so far as the law 
allows ; in other words, that twelve per cent, was in tins in- 
stance the interest to be computed.'' (Shah Makhum Loll v. 
Sreekishen Singh, XII Moore Ind. App., 157 ; XI Suth. 
W. R., P. C., 21 ; Ta&ieduk v. Beni, XIII Gal. L. Rep, 128 ; 
Perladh v. Vroughton, XXIV Suth. W. R., 275.) The 
judgment of their Lordships, however, does not touch the 
general rule on the subject, which is, that in usufructuary 
mortgages, where there is no stipulation for interest, the 
mortgagee is not entitled to any, but must be satisfied 
with the usufruct which goes in lieu of interest, although 
such usufruct may not amount to twelve per cent, on the 
principal money. (Ganga Persad Roy v. Bibee Enayit 
Zaheria, XVI Suth. W. R., 251, distinguishing Shah Ma- 
khum Loll v. Sreekishen Singh, XII Moore Ind. App., 157. 
Of. Kullyan Das v. Sheonundun, XVIII Suth. W. R., 65 ; 
Ram v. Admed, Bom. P. J., 1882, 385.) 

We saw in the last lecture that, since the repeal of the 
laws against usury, mortgagee may always relieve him- 
to account, self from the liability of accounting for the actual profits 
by an agreement with the debtor. The prohibition on the 
free power of the parties to contract in any manner they 
please has been withdrawn. The profits may be either 
taken in lieu of interest (Act XXVIII of 1855, section 5), 
or the parties may agree upon a certain sum beforehand, 
as the basis on which the account between them is to be 
taken, and this brings me back to the question of zuripeshgee 
leases. You will remember that our Courts refused to 
Acknowledge zuripeshgees as leases on a reserved rent, 



Effect of 
an agree- 
ment not 



EFFECT OF AQRHKMKOT. 297 

because they might be made the means of obtaining usu- LECTOHB 
rious interest. That argument cannot any longer hold VHI - 
good, now that the laws against usury have been repealed, 
and a mortgagee, entering into possession as a zuripeshgee- 
dar, will probably be now regarded, not as mortgagee in 
possession but as lessee at a fixed rent. (See Lecture VII.) 
The relation, however, is so peculiar that we must be cautious 
in extending to it all the incidents of an ordinary tenancy. 
The English Court of Chancery, I must tell you, looks 
upon such transactions with the greatest jealousy, a jealousy 
which has not been relaxed by the repeal of the usury laws. 
" One effect," says Vice-Chancellor Stuart, " of the repeal of 
the usury laws was to bring into operation to a greater ex- 
tent than formerly another branch of the jurisdiction of the 
English Equity Courts, namely, the principle which pre- 
vented any oppressive bargain, or any advantage exacted 
from a man under grievous necessity, from prevailing 
against him." " In order," adds the learned Judge, " to 
render a contract or an agreement of any kind binding, 
there must be the assent of both parties to the agreement, 
under such circumstances as to show there was no pressure, 
no influence existing of a kind to make the assent an imper- 
fect assent, or an assent which, under other circumstances, 
would have been refused. If the assent to the agreement 
is not an assent given under such circumstances as that 
both parties are on an equal footing, and the agreement, 
one perfectly free from any influence or pleasure in the 
eye of this Court, it is not an assent sufficient to constitute 
an agreement." (Barret v. Hartly, 2 L. R., Eq., 795.) 

It may, however, be suggested that such a doctrine, un- ^ r e "j^." f 
less fenced in by limitations, which would narrow its appli- trine, 
cation only to every exceptional cases, would be likely to 
introduce the very same evils which the Legislature intend- 
ed to remove when it applied the sweeping brush to the 
usury laws in our statute book. Indeed, the doctrine itself 
in its relation to debtors and creditors is a " survival." It is 
another illustration of the "half-conscious repulsions," 
which we feel to doctrines which we cannot deny. In 
speaking of them, Sir Henry Maine says : " It seems to 
me that the half-conscious repulsions which men feel to 
doctrines which they do not deny, might often be examined 
with more profit than is usually supposed. They will some- 
times be found to be the reflection of an older order of 
ideas. Much of moral opinion is no doubt in advance of 



298 LAW OF MORTGAGE. 

LECTURE law, for it is the fruit of religious or philosophical theories 
VIIL having a different origin from law and not yet incorporat- 
ed with it. But a good deal of it seems to me to preserve 
rules of conduct which, though expelled from law, linger 
in sentiment or practice. The repeal of the usury laws 
has made it lawful to take any rate of interest, yet the 
taking of usurious interest is not thought to be respectable, 
and our Courts of Equity have evidently great difficulty 
in bringing themselves to a complete recognition of the 
new principle." (Maine's Village Communities, p. 195.) 
Moral I have dwelt at some length on the point, as there are 

semi- indications at the present moment of a desire on the part 
lt3 ' of our Courts to introduce into this country some of the 
doctrines of the English Court of Chancery, which rest, 
not upon the basis of economical science but upon certain 
vague moral sentiments, which lie outside the pale of 
positive law. See for instance Vinayak v. Raghi (IV 
Bom. H. C., Rep., 202, A. C. J.) 

Extent of We saw that since the repeal of the usury laws, a 
'liability mortgagee may not only receive the rents and profits in 
> account. j. eu Q i n eres ^ b u t- he may also protect himself from 
accounting for the actual receipts by an agreement with 
the mortgagor. In the absence, however, of any such 
agreement, the mortgagee is still bound to account for 
every farthing received by him out of the estate, and he 
will not only have to account for the rents actually rea- 
lized, but also for such as he might have received but for 
his wilful default^/). 

Allowance A mortgagee, however, is entitled in account to any 
for neces- outlay made by him in the preservation of the property, 
pairs.* 6 " as f r necessary repairs, and interest is generally allowed 
on the amount of the outlay at the rate reserved by the 
mortgage. In the case of Jogendranath Mullick v. Raj- 
narain Palooye (IX W. R., 488). Mr. Justice Kemp 
observed : " Under the law as administered in this country, 
a mortgagee in possession is in the position of a trustee. 
The mortgagee must use the mortgaged premises as liable 
to become the property of the mortgagor, and must not do 
anything to diminish the security upon which the money was 
lent. In this case, the mortgaged property was a thatched 

(<7> Where the rights of the parties are defined by a decree of Court, 
they must be determined, not with reference to the general law, but 
with reference to the terms of the decree. (Navlii v. Raghu, I. L. R., 
VIII Bom., 303, where the mortgagee in possession under a decree was 
held not liable to account to the mortgagor for the rents and profits.) 



REPAIRS. 299 

house. To allow it to fall out of repair and to become un- LKCTUHK 
inhabitable, would have been diminishing the value of the vm - 

security on which the money was advanced, and preventing 

the mortgagor from paying off the debt from the usufruct. 
It is the bounden duty of the mortgagee in possession to 
keep the premises in necessary repair, and he will be 
allowed to charge for the same with interest." (Ameeroola v. 
ttamdass, II Agra H. G. Rep., 187; Manchursa v. 
Kamrunisa, V Bom. H. C. Rep., 109, A. C. J.; Rugho v. 
Anaji, V Bom. H. C. Rep., 116, A. C. J. ; Jamal v. Malta- 
med, Bom. P. J. 1874, 7; Balaji v. Nana, Bora. P. J. 1881, 
195, a case of repairing wells). 

You will observe that, in the judgment of the Court in Repairs 
Jogendranath Mullick v. Rajnarain Palooye, it is said howfar 
that it is the duty of the mortgagee to keep the mortgaged ao'ry?" 1 * 
premises in repair. This is, no doubt, true in a certain 
sense, but the proposition requires one qualification. A 
mortgagee is not bound to make any outlay even in 
necessary repairs, except where there is a surplus left after 
the deduction of the interest from the rents. A different 
rule might be ruinous to the mortgagee. 

A mortgagor is not only bound to pay as the price of Hepnirs 
redemption the cost of proper and necessary repairs, but \ 
also any expenses incurred by the mortgagee in restoring 
the mortgaged premises where they have been accidentally 
destroyed, and the mere fact that the expenses greatly exceed 
the amount of the principal money secured by the mortgage 
would not, it seems, constitute over improvement. (Manchar- 
sha Ashypanoiori v. Kumrunisa Begum, V Bom. H. C. Rep., 
109.) A mortgagee has also been allowed in this country 
for the expenses incurred in connection with the Revenue 
Survey of the land mortgaged to him. (Bapusabin Sadasiv 
v. Ramjibun Gopalji, II Bom. H. C. Rep., 220 (h). If, how- 

(h) It is necessary to state that the Bombay High Court has refused 
to apply the strict rule of the English Courts of Equity as against :v 
mortgagee in possession under a mortgage made before the decision 
of the Court in Rumji v. Chintoo, and who had been led into the belief 
that by reason of the non-payment of the money at the time fixed in the 
mortgage-deed his right had become absolute. (Anandrav and Devrav v. 
Rarji. II Bom.H. C. Rep., 24 4 ; Smith v. Simpson. VII Moore, 205 ; 
Ramji v. Chintoo, lEom. H.C., 199 ; RamsJiot v. Paudhay, VIII Bom. H. 
C. liep., 236. A. C. J.) If the mortgagee is not called upon to account, no 
allowance will be made for cost of repairs, such cost being necessary to 
the enjoyment of the profits. (Lakshman v. Hari, I. L. R., IVBom., 584.) 
But he may be entitled to be repaid sums expended in constructing a 
new work, an embankment, for instance, for the protection of the 
mortgaged property. (Fakir v. Urn-abai, Bom. P. J., 1884, 9.) 



300 



LAW OF MORTGAGE, 



Summary. 



LECTURE ever, there is an express agreement between the parties on 
VIII. the point, it is not competent to the court to go outside the 
instrument. (Narayan v. JRangu Bai, I. L. R., V Bom., 
127.) 

To sum up what I have said ; the right of the mortgagee 
to be reimbursed for necessary repairs is not co-extensive 
with his liability to answer for non-repair by which the 
mortgaged premises may be diminished in value or wholly 
destroyed. The mortgagee in possession is not bound to 
rebuild a ruinous house, for instance, or increase his debt by 
laying out anything beyond the rent. The property may 
deteriorate by lapse of time, or even owing to want of 
repair, but the mortgagee will not be held answerable in the 
absence of gross or wilful negligence. The extent to which 
the mortgagee may safely go in repairing the mortgaged 
estate, is thus laid down by Fisher in his work on Mortgages, 
and the rule has been followed in this country as founded in 
equity and good conscience. " The mortgagee will be 
allowed for proper and necessary repairs to the estate, and 
if buildings are incomplete or become ruinous so as to be 
unfit for use, he may complete or pull them down, and 
rebuild for the preservation of his security. And the 
rebuilding or repairing may be done in an improved 
manner and more substantially than before, so that the 
work be done providently, and that no new or expensive 
buildings be erected for purposes different from those for 
which the former buildings were used, for the property 
when restored ought to be of the same nature as when the 
mortgagee received it ; and if it be thus wholly, or in part, 
converted from its original purposes, the money expended 
will not be allowed to be charged upon it." (Fisher on 
Mortgage, p. 887.) A mortgagee will be allowed all his 
fair expenses in renewing leases, protecting the title to the 
mortgaged property, paying head rent, as well as the costs of 
necessary repairs. I may mention that interest is general- 
ly allowed on such outlay, but not apparently on sums 
expended for repairs, although the reason for this distinction 
is not quite obvious. (Seton on Decrees, 4th Edition, 

1067.) 

The question of improvements presents much greater 
difficult}^. It would, however, seem that as a rule, allow- 
ance will not be made to the mortgagee for improvements, 
even of a lasting kind, unless they are made with the 
sanction of the mortgagor, or are absolutely necessary for 



Improve- 



IMPROVEMENTS. 301 

the preservation of the estate. The mortgagor must not LECTUKK 

be improved out of the estate. (Sandon v. hooper, 12 VI11 - 

L. J. Ch.,309.) (i.) It may not, perhaps, be here out of 

place to mention that in no case will a second mortgagee 

be entitled to charge for improvements as against the 

first. (Land-owners West of England and South Wales 

Land Drainage and Enclosure Company v. Ashford, 16 

Ch. D., 411) Fry, J., in that case said that no authority 

had been shown to him for such a proposition, and that he 

was not going to make such an inconvenient precedent 

for the first time. A mortgagee in this country will be 1 

allowed in account all payments made on account of 

(i) I ought to meiition that iu a recent case in England (Sandon v. 
Hooper has been commented upon, and a view more favourable to the 
mortgage tb an that stated in the text has been taken by the Court. (She- 
pard v. Jones. 21 Ch. D., 469) ; the head note, which is not very full, is to 
the following effect : 

" If a mortgagee in possession, or a mortgagee selling under his 
power of sale, has reasonably expended money, in permanent works on 
the property, he is entitled, on prim a facie evidence to that effect, to an 
inquiry whether the outlay has increased the value of the property, 
aud it has done so. he is entitled to be repaid his expenditure so far as 
it has increased such value. And iu such case it is immaterial whether 
the mortgagor had notice of the expenditure. 

Notice to the mortgagor is only material when the expenditure is 
unreasonable, for the purpose of shewing that he acquiesced in it." 

This judgment, however, I need scarcely point out, is not absolutely 
binding on our Courts any more than the decision in Sandon v. Hooper. 
J am also bound to mention that, although the observations of Jessel. M. 
R., are somewhat general, the judgment of Cotton. L. J.. is more guard- 
ed and is confined to the case of a mortgagor seeking to obtain the 
surplus proceeds of a sale by the mortgagee without allowing for the 
improvements made by the mortgagee, and without which the property 
would not have fetched the price which it did. The judgment, moreover; 
was given on an appeal from an order of Kay, J.. refusing to direct an 
inquiry, and did not, therefore, finally dispose of the question. (Tiptou 
v. Tipton, 1 Ch. D., 192.) As to the lloman Law on the subject. Dr. 
Huuter says : A question arises whether expenses not necessary, but be- 
neficial to the property, ought to be allowed. Paul speaks generally of 
improvements (Paul. Sent. 2, 13, 7,) which would include beneficial ex- 
penditure (ntiles empenose.) Ulpian speaks with more hesitation (D. 13, 
7, 25. ) He recommends a middle course to the judge : on the one hand, 
not to be too burdensome on the debtor ; and on the other, not to be too 
fastidious in disallowing beneficial expenditure by the creditor. He 
puts two cases illustrating of his meaning. A creditor teaches slaves 
a handicraft or skilled work. If this was done with the consent of the 
debtor, of course, the expenditure must be allowed ; also, if the creditor 
only followed up what had already been begun. Necessary instructions 
must also be allowed, but further than that Ulpian was not inclined to 
go. The other case is somewhat different. A large forester pasture is 
hypothecated by a man who is scarce able to pay the creditor ; this cre- 
ditor cultivates it, and makes it worth a great deal of money. Ulpian 
thought it was too hard that the debtor should thereby be improved out 
of his property. (Hunter's Roman Law, p. 440). 



302 LAW OF MORTGAGE. 

LECTURE paramount charges on the mortgaged estate, as also for 
what he has expended in preserving the property from de- 
terioration. Again, if a mortgagee is put to expense in de- 
fending the title to the mortgaged estates, the defence be- 
ing for the benefit of all parties interested in it, he is enti- 
tled to charge such expenses against the estate (Damodar 
v. Vamanrav, I. L. R., IX Bom., 435 ; Sandon v. Hooper, 
6 Beav., 248 ; Parker v. Watldns, Johns, 133). (As to 
what a mortgagee is entitled to claim in England, under 
the head of just allowances, see White and Tudor, L. C., 
Vol. 2, pp. 1237-1242). It is somewhat remarkable that 
till the passing of Lord Cranworth's Act in England, the 
mortgagee was not entitled to add to his mortgage-debt 
any premiums paid by him for insurance, without the 
consent of the mortgagor. But premiums paid by the 
creditor on a life-policy pledged to him were always re- 
coverable on the ground that such payments were made 
for the purpose of protecting the mortgaged property from 
forfeiture. 34, L. J. Ch., 251. 

Payment In the absence of any express contract to the contrary, 
^ ^ s ^ ne duty of the mortgagee in possession to pay the 
Government revenue, and if the mortgagee wilfully default 
to pay the revenue and purchase the property himself, 
the Court will fasten a trust upon the purchase in favour 
of the mortgagor. The mortgagee, who properly or im- 
properly allows an estate to fall into arrear, cannot pur- 
chase it so as to acquire an irredeemable interest. (Nawab 
Sidhi Nazir Ally Khan v. Adjuharam Khan, X Moore 
Ind. App., 540 ; V Suth. W.R., P.O., 83 ; see also Raja Adju- 
dyaram Khan v. Ashootosh Dey, Supreme Court, 6th July 
1855, and Kelsall v. Freeman, Englishman, 4th September 
1854 ; Juggut Mohini v. Sokheemoney, XIV Moore Ind. 
App., 289 ; Rammanick v. Brindabun, V Suth. W. R.,230.) 
Any payment, however, made by the mortgagee, either 
to prevent a forfeiture, or a sale for non-payment of 
revenue or rent, will be credited to him in account. In 
Nurjoon Sahoo v. Shah Moorzeerooddeen (III Suth. W. E., 
26), which was a suit to redeem a usufructuary mortgage on 
paymemt of the principal only, there being no stipula- 
tion for interest, the mortgagee in his defence insisted upon 
his right to retain possession so long as the sums which he 
had been obliged to pay as revenue, the estate having been 
assessed with revenue subsequently to the mortgage, 
were not repaid by the mortgagor or realized from the 



ACCOUNTING. 303 

rents and profits, the Court observed : " Ordinarily the LECTCRK 
law gives to a person interested in land a lien against VHI - 
the defaulting owner for sums of money paid by the for- A'ur/oon v. 
mer in discharge of the public revenue. The payments Moorzee- 
made by the defendant appear to us to entitle him to a ro 
lien within this principle. His equitable claim to such 
protection is certainly not diminished in this case by the 
fact that the plaintiff has pledged to him, as lakheraj 
land, which was not valid lakheraj, and has now been actu- 
ally assessed with revenue ; nor can the plaintiff con- 
tend that the annual receipts from the land, which, when 
it passed into the defendant's hands, were clearly to be 
appropriated solely to the defendant's use (subject to the 
mortgagor's right to an account), became subsequently 
bound for the mortgagor's benefit, although in violation 
of his express agreement to discharge his estate from the 
lien of the person who actually paid the revenue. This 
right is, we think, sufficient to qualify the otherwise un- 
doubted right of the mortgagor to redeem his land on pay- 
ment of the principal alone. If we gave effect to the 
latter right in the present suit, we should, in the probable 
event of the mortgagor requiring no accounts of the mort- 
gagee's receipts while in possession, leave only to the 
mortgagee a doubtful remedy by suit for the money which 
he has paid, a great portion of which would be met by 
setting up the law of limitation as a defence." (Of. 
Achumbit v. Keso, XX Suth. W. R., 128, which was a case 
of dispossession from a part of the mortg.-ige premises). 

Similarly it has been held that, in the case of a usufruc- Payment 
tuary mortgage where the rents and profits were to go in d Avenue, 
lieu of interest, an action may be brought by the mortgagee 
for any enhanced revenue which may have been paid by 
him ; and it has been said that it is not necessary for the 
mortgagee to wait till the end of the term, nor is it neces- 
sary- for the Court to take any account (Nikka Mai v. 
Suliman Sheik, I. L. R., II AIL, 193). 

I shall now discuss tho mode of taking accounts against Mode of 
the mortgagee in possession. The gross collections are 
ascertained at the end of each year, and, after deducting 
the necessary outlay on account of revenue, expenses of 
collection, and preservation of the estate, the balance goes 
to reduce either in whole or ir part the interest, and if 
there is a surplus over, it goes to the reduction of the 
principal, the account being closed at the end of each 



304 LAW OF MORTGAGE. 

LECTURE year. (Cf. lladah Benode v. Kripa Maye, XIV Moore Ind. 
VJI1 - App., 443) in which another mode is pointed out, but the 
result is the same. (RaghunatJt v. Lachman, I Agra H. C. 
Rep., 132; Enaet All v. Khiir Roy, II Suth. W. K, 
289 ; Chutoorbhooj v. Doorga Churn, V Sutli. W. R, 
200 ;S. D. A. 1853, p. 464; S. D. A. 1848, p. 549; S. D. A. 
1852, p. 831 ; S. D. A. 1859, p. 497; S. D. A. 1859, 1211 ; 
S. D. A. 1859, p. 1543.) In England it is not, of course, to 
direcc annual rests against the mortgagee in possession, 
but a different rule obtains in this country. It is, how- 
ever, doubtful whether the right of the mortgagee not to 
be paid piecemeal has been sufficiently considered by our 
courts.- If, however, the mortgage-debt is paid off by 
means of the rents and profits during the possession of the 
mortgagee, he will ordinarily be liable to pay interest on 
all subsequent receipts. (Jai Jit Rai by his guardian 
Porhati Kuor v. Oobind Tewari, I. L. R,, VI All., 303 ; 
Bechoo v. Shebsahoy, I All. H. C. Rep., 111.) (j.) 
liight of It is necessary to observe that the only payments which a 
of" equity* purchaser of the equity of redemption can claim to deduct 
of redemp- from the mortgage-debt are sums actually received in re- 
duction of the mortgage-debt, and that the fact that the 
mortgagee (/c) owed money on some other account to the 

(j) In England the usual practice is to set the total amount of rents and 
profits which are chargeable to the mortgagee against the whole amount 
due on his security, first in discharge of the interest, then of moneys, 
if any, advanced for the preservation of the mortgaged property, and 
lastly, in reduction of the principal. But the excess of rent over 
interest is not annually applied in reducing the principal, as the mort- 
gagee may reasonably object to be paid piecemeal. If, however, there 
is no interest in arrear when the mortgagee enters, the annual surplus 
is generally applied in reduction of the principal money, and this is 
called taking the accounts with rests. If the mortgage, however, con- 
ists of lease-hold property, and there are grounds for apprehending 
hat the rent and insurances will not be duly paid or the houses will 
tnot be kept in proper repair, annual rests will not be directed, even 
though no interest may be in arrear when the mortgagee enters in 
possession. As a rule, however, the mortgagee does not make himself 
liable to this mode of account if he takes possession when the arrear 
of interest is due until the whole debt is discharged. The above rule, 
however, does not apply where any part of the mortgaged property is 
sold iu which case the surplus, after payment of costs and interest, is 
applied to the reduction of the principal and the accounts are continued 
on the footing of the principal thus reduced. Fisher, 872 876. 

(&) There seems to be some conflict of opinion as to whether interest 
should run from the date of the overpayment, or only from the date of 
the institution of the suit for redemption. (Janofiv. Janofi, I. L. R., 
VII Bom., 185 ; Bechoo v. Sheosahay, I All. H. C. Rep., 111). It may be 
here noticed that a mortgagee (and the same remark would apply to a 
mortgagor), seeking to redeem, who has obtained a decree for au ac- 



LIABILITF OF MORTGAGEE. 

mortgagor, would not of itself entitle the purchaser of the LECTURE 
mortgagor's equity of redemption to set off that money vni - 
against the mortgage-debt (Tarineev. Ganoda, XXIV Suth. 
W. R, 460). It seems, however, that a purchaser of the 
equity of redemption will be entitled, on taking the mort- 
gage accounts, to credit for malikana reserved to the 
mortgagor by the mortgage-deed but withheld by the 
mortgagee (Basant Rai v. KanaujiLal, I. L. R., II All., 455). 
It may be here stated that if the mortgagee comes to an 
agreement with some of the mortgagors, by which he con- 
sents to take a money decree against them, the amount of 
the decree must be considered as a sum actually paid in 
reduction of the liability under the mortgage. (Ramkanth 
v. Kalimolian, XX Suth. W. R, 310.) 

I ought to mention that in India, as in England, a mort- Liability 
gagee may transfer his right to a third person by way of "^"in 
assignment, but such transfer must be without prejudice to session 
the rights of the mortgagor ; and in a suit by a mortgagor 
the assignee will be bound by the state of the account be- 
tween the mortgagor and mortgagee (Chinnayya v. Chidam, 
I. L. R., II Mad., 212 (I). The question of the liability of the 
mortgagee in possession after assignment, when it is not 
made with the assent of the mortgagor, for the rents and 
profits received by the assignee, does not seem to have been 
ever raised in this country. In England, the mortgagee 
continues to be liable on the principle that the mortgagee 
must be responsible for the person to whom he assigns the 
mortgagor's estate (m). It may, however, be doubted 
whether the doctrine will be recognized in our Courts. 

The jealousy with which the Court of Chancery guards No allow- 
the interest of the mortgagor, is well illustrated by the 
rule invariably acted upon, that no personal allowance is 

count and sale, is not entitled to withdraw from the taking of accounts 
when those accounts appear to be going against him. (J)oolee Chand v. 
Omda, I. L. R., VI Cal., 377.) 

( 1) Quesre, whether the account arrived at in a decree obtained by 
the prior mortgagee against the mortgagor only is binding on a puisne 
mortgagee, who had no notice of the subsequent incumbrance (Sankona. 
v. JSiru, I. L. R., VII Bom.. 146.) In one case in the Calcutta High Court 
an account was directed to be taken in a suit by a second mortgagee 
against his mortgagor and a third mortgagee, not only of what was due 
to the plaintiff but also of what was due to the third mortgagee. (Auhindro 
v. Chunnoolol, I. L. R., V. Cal., 101.) 

(m) It has been recently held that no such liability is incurred by 
the mortgagee if the transfer is made under an order of Court. (Hall 
v. Heward, L. R., 32 Ch. D., 430.) 

R. B. G., M. 20 



306 . LAW OF MORTGAGE. 

LECTURE to be made to the mortgagee himself, although the salary 
VIII. of an agent may be allowed when the collections cannot 
conveniently be made otherwise. Any agreement to make 
an allowance to the mortgagee is absolutely void, and the 
repeal of the usury laws has made no change in this res- 
pect in the practice of the English Court of Chancery. 
Right and I shall now treat of the rights and liabilities of the 
mortgagee* mortgagee when he allows the profits to be received by 
when mort- the mortgagor instead of entering upon possession himself. 
g ofsessk>n ^ ne ru ^ e ^ English law on the subject is thus stated by 
Fisher as the result of the authorities : " After receiving 
notice of a puisne mortgage, the mortgagee in possession 
becomes liable to account to the puisne incumbrancer for 
so much of the surplus rent as he has paid to the mortga- 
gagor or his representatives ; but so long as the mortgagee 
in possession is without notice, the puisne mortgagee can- 
not call upon him or the mortgagor for an account of the 
bygone rents" (Fisher on Mortgage, p. 875.) This rule 
was applied to an Indian mortgage in this country by 
the Privy Council in Jugjeewan Dass v. Ram Dass. In 
that case, the mortgage-deed, after stating that the village 
of Mujeegum and the house at Sural should be mortgaged 
for a certain sum, went on to say : " The profit of this 
money is settled for twelve annas, on these conditions, that 
the holders of the mortgage are to receive in redemption 
the whole of the produce of the said village, about 3,000 
or 3,200 rupees, and after allowing for interest, the remain- 
der will go for the purpose of liquidating the principal, 
and they shall continue so to receive and appropriate 
the annual produce until the whole of their demand be 
liquidated. The risk of collecting the income, and of any 
deficiency in the revenue, is upon our heads, that is the 
mortgagor's ; and we do further declare that the holders 
of the said mortgage shall station a mehta or clerk of their 
own in the said village, for the purpose of making the 
collections ; and we, the mortgagors, so long as this pro- 
perty remains in mortgage, do agree to give him a month- 
ly salary of five rupees and his daily food so long as we can 
afford to do so." It seems that the mortgagee continu- 
ed in possession under this deed for a short time, but 
Jugjeewan afterwards allowed the mortgagors to receive the rents 
v. and profits. In execution of a decree obtained by the 
" 9< plaintiff against the mortgagors, the property was placed 
under attachment when the mortgagee for the first 



LIABILITY OF MORTGAGEE. 30? 

time had notice of the plaintiffs claim. In determining LECTURE 
the respective rights of the parties, the Privy Coun- vin - 

cil said : " Now the question will be, in what way the 

mortgagee's rights are affected by this conduct ; and that 
will depend, first, upon the construction of the instrument 
itself. If this is a binding contract, binding between 
him and the mortgagors, binding him to apply the rents 
and profits to the payment of the debt, he might be con- 
sidered as having forfeited his right to payment in conse- 
quence of having allowed the mortgagors themselves to 
take possession of the rents and profits during some of 
the years during which his mehta was in possession. But 
their Lordships are of opinion that that is not the true 
construction of the deed, but that it is merely a power to 
satisfy himself, just as an English mortgagee may, by 
taking possession of the rents and profits of the estate ; 
and if an English mortgagee chooses to forego the benefit 
of receiving the rents and profits, and permits the mortga- 
gor to take them, it would have no effect as between him 
and the mortgagor ; he would have a full right to recover 
his debt by reason of the mortgage. The only effect 
would be, when some subsequent incumbrancer came in, 
and he had notice of that claim. In that case, the rule 
and law in England would be that if, after notice, he per- 
mits the mortgagor to receive the rents and profits, he 
exposes himself to the claim of the second incumbrancer ; 
and that is the principle which their Lordships think 
ought to be applied to the present case." (Jugjeewan 
Dass v. Ram Dass Brijbhukun, II Moore Ind. App., 487 ; 
VI Suth. W. R,, 11 P. C.) By the decree which was 
ultimately made, the mortgagees were postponed to the 
attaching creditor in respect of the rents which might 
have been received by them, but for their allowing the 
mortgagors to continue in possession. The rights of the 
mortgagees against the mortgagors personally were left 
.untouched, and they were only permitted to continue in 
possession till the balance settled on the above principle 
was realized. A fortiori if the mortgagee makes any pay- 
ments to the mortgagor after he has notice that the 
equity of redemption has been purchased by a third person, 
he will not be allowed such payments in account (Jai Jit 
Rai by his guardian Porbah Kuor v. Oobind Tewari, 
I. L. R, VI All., 303.) Similarly, if the first mortgagee, 
with notice of a subsequent incumbrance, joins with the 



308 LAW OF MORTGAGE. 

LECTURE mortgagor in a sale of the mortgaged premises, and permits 
VIIL the latter to receive the purchase-money, he will be post- 
poned to the second mortgagee in respect of the amount 
received by the mortgagor. (Bentham v. Haincourt, Pre. 
Ch. 30 ; Of. West L. G. Bank v. Reliance, P. B. 8., 27 Ch. D., 
187. S. C. in appeal, 29 Ch. D., C. A., 954.) 

Mortgagor While on the subject of accounting, I may mention that 
s?onnot S ~ the mortgagor in possession is not bound to account,al though 
bound to the security may be insufficient. This is the rule of English 
account. j aw ^ an( j j g a j g() ^Q j aw j n fa^ country. A mortgagor, how- 
ever, may be liable to an action for mesne profits, if he with- 
hold possession from the mortgagee in violation of the terms 
of his contract, or after notice by the mortgagee. It is 
scarcely necessary to repeat that the mortgagor will also 
be liable for mesne profits from the date of the final fore- 
closure (i.e., from the expiration of the year of grace). 
There are expressions in some of the reported decisions 
of the Sudder Dewany Adawlut, which might, at first 
sight, seem to countenance the notion that it was only 
from the date of the decree for foreclosure that the mort- 
gagor would be liable for mesne profits. I have, however, 
already pointed out to you that the rights of the parties, 
after a decree for foreclosure, are precisely those which they 
possessed at the date of the expiration of the year of grace. 
The decree only declares those rights, and it must therefore 
follow, that, if there is any liability in the mortgagor for 
mesne profits, that liability must exist before the decree for 
foreclosure, and consequently at the expiration of the year 
of grace, which may be called the dividing point of time. 
Mortgagee The question has arisen as to the precise position of a 
tee for"" 3 " mortgagee after the mortgage-debt has been liquidated 
mortgagor, by the usufruct. It seems to have been held in some cases 
that his position was that of a trustee, and that therefore 
no limitation was applicable to a suit brought by the 
mortgagor for surplus profits. These decisions were, how- 
ever, overruled by a Full Bench of the Calcutta High 
Court, and the period of limitation was held to be six 
years (Baboo Loll Doss v. Jamal Ali, IX Suth. W. R, 
187.) This was under the old law. Under the present Act, a 
suit for surplus profits must be brought within three years 
of the date on which the mortgagor re-enters on the mort- 
gaged property (n). The interpretation clause also tells 

(tt) It may be noticed that an action for redemption ought to include a 
claim for over-payments. (Baloji v. Taman, VI Bom. H. C. Hep., 97, 



LIABILITY OF MORTGAGEE. 309 

us that a mortgagee is not a trustee within the meaning LECTUBK 
of the Act. ( Willoughby v. Willoughby, 1 Term Rep., 765 vin - 
Casburne v. Inglis, 2 Jac. and Walk., 194, 196, in note ; see 
also Warner v. Sack, 20 Oh. D., 220, in which case Doivnes 
v. Grasebrook, 3 Mer., 200, aud Robertson v. Norris, I Giff., 
421, were observed on.) 

A question of some nicety arose a few years ago in the Joymungut 
High Court of Calcutta as regards the liability of a mort- 8ing>B c ** e - 
gagee to account for mesne profits, which was ultimately 
heard by a Full Bench. In that case, which was a suit for re- 
demption, the principal having been deposited, the mortgagee 
was called upon to account for moneys which he had real- 
ised by means of a decree for mesne profits against the 
mortgagor, who had evicted him from the mortgaged pre- 
mises. The question arose under Regulation XV of 1793, 
and it was contended for the mortgagor that the mortgagee 
was bound to account to him for the moneys which he had 
succeeded in realizing from the mortgagor in excess of the 
legal interest of twelve per cent, per annum. It was, how- 
ever, held by the Full Bench that the mortgagee was not 
liable to account for the mesne profits. In giving judgment, 
Peacock, C. J., said : " There is a wide distinction between 
usufruct collected by a mortgagee in possession and 
damages which are awarded to a mortgagee in a suit 
brought by him against the mortgagor for evicting him. 
We think that the defendants were not bound under the 
words or the spirit of Regulation XV of 1793, or Regula- ^^ 
tion I of 1798, to account for the wasilat or damages which f rom usu- 
they have received under the decree in the suit brought fruct - 
by them against the mortgagor for possession. If a mortga- 
gor wrongfully turns a mortgagee out of possession, it is 
his own fault, and the mortgagee is entitled to retain any 
wasilat which he may recover against the mortgagor, and 
is not bound to account for it. To prevent an evasion of 
the usury laws, the Regulation compelled the mortgagee to 
account for the usufruct ; if that exceeded interest at 
twelve per cent., the balance was to be accounted for. We 
think that a Regulation of this kind must be construed 
strictly, and that we ought not so to construe it as to 

A. C. J. Distinguish Gour v. SaJiay, VII Suth. W. R., 364 ; cf. Fisher's 
Mortgage, p. 857, note. Qutsre, as to the effect of Art. 105 of Act XV of 
1877.) The general practice seems to be to allow interest on the over- 
payments from the date of the institution of the suit for redemption by 
the mortgagor. (Jattoji v. Janojl, I. L. R., VII Bom., 185 ; S. D. A. 1853, 
p. 464 ; N. W. P. 1855, p. 257.) 



LAW OF MORTGAGE. 

LECTURE substitute wasilat recovered by a decree of Court for usu- 
VIII. fVuct enjoyed by a mortgagee. The case of Chutterdharee 
Kowar v. Ramdoolun Kowar (Sudder Decisions of 1859, 
p. 1181), is a case very much in point, though the question 
arose in a different form." (Joymungul Sing v. Sardeen, 
VI Suth. W. R., 240.) 

Niikant In the case of Nilkant Sen, the facts of which were 
Sen's case, somewhat peculiar, the mortgagee had wrongfully dis- 
possessed the mortgagor, the mortgage being one by 
conditional sale, and not giving the mortgagee power 
to receive the rents and profits. The mortgagor brought 
a suit for possession and mesne profits. He got a decree 
for possession, but the prayer for mesne profits was 
rejected, apparently because there was some technical 
informality in the prayer in the plaint. The mortgagee 
subsequently proceeded to foreclose, and when he brought 
a regular suit for possession as absolute owner, the Court 
held that he was bound to account for the profits during 
the time he was in possession, just in the same manner 
as if he had been let into possession by the mortgagor. It 
would seem, although the fact is not clear from the report, 
that a suit for inesne profits would have been barred 
(Nilkant Sen v. Joynedin, VII Suth. W. R., 30 ; cf. Jaigit 
v. Govind, I. L. R, VI AIL, 303.) 

Mortgagee A mortgagee in possession, who instead of letting the 

chargeable land to tenants and realizing the rent in the ordinary way, 

pationrent. cultivates it himself, is not liable to account for the whole 

of the profits arising to him from farming the land, but 

only for such profits as he would have received, if he had 

let the land to a tenant, and so in the case of any other 

profits, the mortgagee, if in possession, is chargeable only 

with an occupation rent. (Rughunath Roy v. Gridhari 

Sing, VII Suth. W. R., 244.) 

Mortgagee '"' ne position of the mortgagee is not, however, that of a 
not a fen- tenant. He is in as mortgagee. Thus, for instance, where 
"** the mortgagee of a house was let into possession under 

an agreement, that he should pay a certain rent annually, 
part of which was to be set off against the interest, and the 
residue payable to the mortgagor, and the house was destroy- 
ed by fire, the Court was of opinion that the mortgagor was 
not entitled to recover any rent, although the decision would 
not improbably have been the other way, if the relation be- 
tween the parties had been only that of landlord and tenant. 
The gist of the agreement was, as the Court pointed out, not 



ATTOKNMENT CLAUSE. 

a letting of the premises with a rent reserved, but a usufruc- LKCTUBK 
tuary mortgage with a certain small portion of the usufruct VIII. 
payable to the mortgagor (Venkatashwara v. Keseva Shetti, Eg ~ t 
I.L.R., I.L Mad., 187.) It is necessary to observe that an attornment 
attornment clause in a mortgage-deed, such as is frequently clau5 * in 
found in an English mortgage, will not render the mortgagee K 8 ** 
liable to account on the footing of mortgagee in possession 
in respect of the rent reserved by the attornment clause (o). 
A mortgagee is not obliged to avail himself of this clause, 
and there is no ground for saying that, because the mortgage- 
deed contains such a clause under which, however, no posses- 
sion is taken, the mortgagee is fixed with all the liabilities of 
mortgagee in possession (Stanley v. Grundy, L. R., 22 
Ch. D., 478.) But if the mortgagee gives notice to the 
tenants not to pay their rents to the mortgagor, he be- 
comes entitled to take possession, and though he may not 
afterwards actually take possession, he will be answerable 
to the mortgagor for any loss sustained by him. It is the 
duty of the mortgagor either to take possession himself or 
to leave the mortgagor alone (Heabes v. MacMurray, 23 
Beav., 401). Again, the fact that the mortgagee is in receipt 
of the rents and profits of the mortgaged estate,does notneces- 
sarily make him chargeable as mortgagee in possession. The 
question, whether he is a mortgagee in possession, depends 
upon whether he has taken out of the mortgagor's hands 
the power and duty of managing the estate and dealing 
with the tenants. Thus, for instance, where B was the agent 
of the mortgagor, and received the rents of the estate, apply- 
ing them in payment of the interest to the mortgagee, and 
the mortgagee wrote to B, enclosing notices to the tenants 
to pay the rents to him which B was to serve on them if 
the mortgagor should attempt to interfere, and B replied, 
promising to pay the rents to the mortgagee, and not to the 
mortgagor, and the notices were not served on the tenants, 
but B paid the rents, as he received them, to the mortgagee, 
it was held that the mortgagee could not be charged as 
mortgagee in possession (Noyes v. Pollock, 32 Ch. D., 
53.) Appointing a clerk for the purpose of collecting the 
rents may amount to taking possession (Jugjeewan v. 
Ram Dass, II Moore. Ind. App., 487). It is, perhaps, scarcely 
necessary to point out that a mortgagee in possession of 
only a part of the mortgaged estate, who allows the inort- 

(o) As to the distinction between an ordinary tenancy and an attorn- 
ment clause in a mortgage-deed, see In re Ishericood, 22 Ch. D., 384. 



312 LAW OF MORTGAGE. 

LECTUBB gagor to retain possession of the rest, will not be charged 
vm ; constructively as if he had beeu in possession of the whole. 

(Soor v. Daily, 15 Beav., 156.) 

? Iort ^ a s gee ^ ou ghk to niention that, although it is not correct to 
sellable speak of a mortgagee in possession as a trustee for the 
for dam- mortgagor, he will be liable to account for any damage done 
to the property, as by pulling down buildings improperly 
(Sandon v. Hooper, 6 Beav., 246, 14 L. J. Oh., 120). Simi- 
larly the mortgagee will be liable if he allows any minerals 
to be taken away by third persons from the mortgaged 
lands (Hood v. Easton, 2 Giff., 692), and in one case a mort- 
gagee in possession of lease-holds was charged for permit- 
ting the forfeiture of a lease by reason of a breach of a cove- 
nant to complete buildings on the demised land. (Perry v. 
Walker, 1 Jur. N. S., 746.) 

fedem for ^ n concluding this lecture, I wish to say a few words on 
tion. the manner in which suits for redemption are treated by 
the Courts in Bengal and the North-Western Provinces. 
The practice has been to treat a suit for redemption as a 
suit for ejectment, and to refuse any relief to the plaintiff, 
except upon proof that every condition necessary to the 
right to immediate possession, has been fulfilled. You will 
find it laid down in several cases, that, in a suit for redemp- 
tion, the mortgagor must fail, if anything is due to the 
mortgagee on the security, and the plaintiff cannot 
show that he had deposited or tendered the amount (p~). In 
some instances, however, conditional decrees have been 
made, and in recent cases the Court has shown some 
disinclination to adhere to the old practice ; a practice which, 
I venture to think, is attended with inconvenience as well to 
the mortgagor as to the mortgagee. It is true that plaints are 
Bengal "* n0 ^ verv artificially framed in the Mofussil Courts, and 
suits are very frequently brought for recovery of possession 
on the allegation that the mortgage-debt has been satisfied. 
Such suits, however, are substantially brought for the pur- 
pose of ascertaining as between the parties what is the 
state of the account, a right which is expressly given by 
Statute to the mortgagor. We saw that, according to the 

(p) Ordinarily, a suit for an account upon a mortgage cannot be 
maintained by a mortgagor, unless lie also prays for redemption. 
(Hurry v. Lakshman,!. L. R., V Bom., 614; SliamJtarapa v. Dattapa, 
I. L. R., V Bom., 604.) Where, however, the objection was not taken in 
the Court below, the mortgagor has been allowed, even in second appeal, 
to convert the suit into one for redemption. (Hart v. Sitaram, Bom. 
P. J., 1882, 159 ; Jicaji v. Kaha, Bom. P. J. 1883, 9.) 



REDEMPTION. 313 

practice of the English Court of Chancery which is LECTURE 
followed in the other provinces, the Court, in a suit VIIL 
for redemption, invariably takes an account of the 
monies due to the mortgagee on his security, and if 
anything is due to the mortgagee, the mortgagor is directed 
to pay it by a time appointed by the Court, and on his 
failure to do so, the suit for redemption is dismissed ; such 
dismissal having generally the same effect, and carrying with 
it the same consequences, as a decree for foreclosure. It 
would be difficult to suggest any reason why the same 
practice should not be followed in Bengal. According to the 
present practice of our Courts, the Court is bound to take 
an account in a suit for redemption, but, even if a single 
rupee be found due to the mortgagee, the suit is dismissed ; 
and, however carefully the account may have been taken, the 
finding of the Court would seem not to be binding upon 
either party in any subsequent suit. This naturally leads 
to a perfect waste of litigation which might be easily 
prevented by the exercise of the power, which our Courts 
undoubtedly possess, of moulding their decrees in such a 
way as to meet the exigencies of each case. (See the ob- 
servations of Phear, J., in Mu/tund Loll Suhul v. Goluk 
ChunderDutt, IX Suth. W.R., 572. Compare IV N.W. P., 37; 
V N. W. P, 104 ; VI N. W. P, 221 ; X N. W. P., 543 ; S. D. A., 
1849, p. 392). The following recent cases may be use- 
fully consulted by the student : Shah Lutafut Hossein v. 
Choivdry Mahomed Moneim, XXII Suth. W. R., 269 ; Rajah 
Saheb Perladh v. Broughton, XXIV Suth. W. R., 275. See 
also Kullyan v. Sheonundun, XVIII W. R., 65 ; Dinkur 
Doyal v. Sheogolam, XXII W. R., 172. Compare Brijoolall 
v. Muity, Suth. F. B., 33. In a recent case a conditional 
decree for redemption was made by the Allahabad High 
Court in a usufructuary mortgage. (Sahibzada v. Por- 
meshor Dass, I. L. R., I All., 524.) See also Raja Radha 
Kant Rai v. Bhagwun Das, I. L. R., I AIL, 344 ; Bhairab 
Mondal, XVII W. R., 408. 



LECTURE IX. 



Liens 
legal and 
judicial. 



Liens Legal and Judicial Distinction between Statutory liens Regulation 
VIII of 1819 and Act VIII of 1869 (B.C.) Act XI of 1859 Salvor's lien- 
Lien of co-sharer for revenue paid by him Unpaid vendor's lien Mackreth 
v. Symmons What constitutes waiver of lien Objections to legal liens 
Registration Purchasers without notice Practice of English Court of 
Chancery Purchaser's lien Lien of partners and agents Tenants in com- 
mon No lien for dower in Mahomedan law None in favour of creditors on 
assets of deceased debtor in Hindu or Mahomedan law Judicial lien At- 
tachment before and after judgment Operation of Section 240 of Act VIII 
of 1859 Alienation by debtor not absolutely void Anund Mohun Dass 
v. Radha Mohun Shah Striking off attachment Effect olPuddomoney 
v. Roy Mothuranath Chowdhry. 

IN the present lecture I propose to treat of liens or securi- 
ties created by the operation of law. In the introductory 
lecture I pointed out to you the difference between these 
charges and charges created by the express or implied 
consent of the parties. I also stated that liens may be 
divided into two groups, legal and judicial ; the one consti- 
tuting a part of substantive law, and the other, a part of 
the law of procedure. I propose to discuss the law relat- 
ing to legal liens in the first place, and then to treat of 
judicial liens (a). 

(a) The liens here discussed are known as non-possessory in the 
English law, and are divided by English lawyers into equitable and 
judicial. Liens of this class are actively enforceable, and do not con- 
fer a mere passive right of retainer. I may here mention that the 
application of the word ' lien ' from a French word signifying ' tie ' 
is of comparatively modern date in the English law. " The right of 
retainer which was allowed by the English law, at least as early as the 
reign of Edward IV, is not mentioned by this name in the early reports ; 
and the word ' lien ' appears not to have found its way into the Law 
Dictionaries so late as 1671 and 1672. Editions of Termes de la Ley 
and of Cowell's Interpreter, printed in those years do not contain it. 
The want of precision in its use is remarkable. A common law lien 
depends upon retainer ; and as there can be no retainer without pos- 
session, the word itself is often said to imply possession, although it 
originally had no such force and even at law it is used to denote the 
right of a judgment-creditor. But in equity it ia used not only in the 
common law sense, and also as descriptive of an equitable right not 
depending upon possession (such as the vendor's lien for the purchase- 
money of land), but is also often applied to equitable mortgages and 



LEGAL LIENS. 315 

I have already said that there are some cases in which LECTURE 
a hen is expressly conferred by statute, while there are IX 
others in which the right has been recognised by our 
Courts of Justice as resting on those principles of equity 
which the Indian Courts are bound to administer. But 
though they are the growth of 'judicial legislation,' I need 
hardly point out, they do not differ in any essential feature 
from the class which may be called statutory liens. The 
earliest instance of the latter is furnished by the enact- 
ment contained in the 13th section of Regulation VIII 
of 181 9. That section says : "If the person or persons 
making such a deposit in order to stay the sale of the supe- 
rior tenure, shall have already paid the whole of the rent 
due from himself or themselves, so that the amount lodged 
is an advance from private funds, and not a disbursement 
on account of the said rent, such deposit shall not be 
carried to credit in ,or set against, future demands for rent, 
but shall be considered as a loan made to the proprietor 
of the tenure preserved from sale by such means, and the 
taluk so preserved shall be the security to the person or 
persons making the advance, who shall be considered to 
have a lien thereupon in the same manner as if the loan 
had been made upon mortgage (6); and he or they shall 
be entitled, on applying for the same, to obtain immediate 
possession of the tenure of the defaulter in order to recover 
the amount so advanced, from any profits belonging there- 
to. If the defaulter shall desire to recover his tenure from 
the hands of the person or persons, who, by making the 
advance, may have acquired such an interest therein and 
entered in possession in consequence, he shall not be en- 
titled to do so except upon repayment of the entire sum 
advanced, with interest, at the rate of twelve per cent, per 
annum, up to the date of possession having been given as 
above, or upon exhibiting proof in a regular suit to be insti- 
tuted for the purpose, that the full amount so advanced, with 
interest, has been realized from the usufruct of the tenure." 

securities of a like nature which rest simply upon contracts. Although 
contracts are sometimes expressed to be made for mercantile liens, no 
actual liens are so conferred. The express stipulation and agreement 
for a seecurity excludes the lien and limits the rights by the extent of 
the express contract. Ex-pressutn faclt cetsare taciturn. Per Sir W. Grant, 
2 Mer. 404 ; per Lord Westbury, L. R., 1 P. C., 305." Fisher's Mortgage, 
p. 107, note () 

(i) Compare section 17, clause 5. of the same Regulation, and see 
Surnomoye Dassya v. The Land Mortgage Bank, I. L. R., VII CaL, 173, 
on the question of priority. 



316 LAW OF MOETGAGE. 

LECTURE This, I need hardly point out, is a very beneficent provi- 
1X1 sion, and was extended by section 62 of Act VIII of 1869 
Provisions (B.C.), to the case of a tenure about to be sold under that 
of the Ac^ anc i the payment of the rent by any one interested in 
Act. an y the protection of the under-tenure ; and now by the Bengal 
Tenancy Act a similar privilege is given to any person hav- 
ing, in a tenure or holding advertised for sale, an interest, 
which would be voidable upon the sale, if he pays the 
amount requisite to prevent such sale. It is worthy of 
notice that the Act goes on to provide that the lien in 
favour of the person making the payment shall take prior- 
ity over every other charge on the tenure or holding 
other than a charge for arrears of rent (Act VIII of 1885, 
section 161.) (Of. Act II of 1864 (Madras) which gives the 
mortgagee a charge on the land in respect of arrears of 
revenue paid by him, " but such charge shall only take 
priority according to the date at which payment was 
made.") 

Revenue Another provision of a similar character, but somewhat 
Sale Law. j egg am pj e j s to be found in section 9 of Act XI of 1859. 
That section, after enacting that the revenue in arrear may 
be tendered in certain cases by a person who is not the pro- 
prietor of the estate, goes on to say : " And if the person 
so depositing, whose money shall have been credited as 
aforesaid, shall prove before a competent Civil Court that 
the deposit was made in order to protect an interest of the 
said person, which would have been endangered or dam- 
aged by the sale, he shall be entitled to recover the amount 
of the deposit, with or without interest as the Court may 
determine, from the defaulting proprietor. And if the 
party so depositing, whose money shall have been credited 
as aforesaid, shall prove before such a Court that the depo- 
sit was necessary in order to protect any lien he had on 
the estate or share, or part thereof, the amount so credit- 
ed shall be added to the amount of the original lien." 
Salvage These enactments rest upon a plain principle of equity, 
hens. ^0 cnar g es created by them being recognized in most 
systems of law under the name of salvage liens, an expres- 
sion not wholly useless nor absolutely misleading, and 
conveying, notwithstanding the recent protest of an eminent 
English Judge, a definite meaning, a recommendation not 
always possessed by some of even the most familiar terms 
in the English law. In the case of Nogender Chunder 
Ghose against Sreemutty Dasi, although the Act then in 



LEGAL LIENS. 317 

force in terms gave only a personal remedy to the mort- LKCTUBI 
gagee (c), their Lordships of the Privy Council observed : IX - 
" Considering that the payment of the revenue by the 
mortgagee will prevent the taluk from being sold, their 
Lordships would, if that were the sole question for their 
consideration, find it difficult to come to any other conclu- 
sion than that the person, who had such an interest in the 
taluk as entitled him to pay the revenue due to the 
Government, and did actually pay it, was thereby entitled 
to a charge on the taluk, as against all persons interested 
therein, for the amount of the money so paid " (XI Moore 
Ind. App., 241; S. C., VIII Suth. W. R., P. C., 17.) And 
this dictum of their Lordships was held to justify the 
mortgagee of a putnee taluq in claiming a lien for pay- 
ments made by him on account of the head rent due to the 
zemindar Mohesh Chundra Banerjee v. Ram Prosonno 
Chowdhry (I. L. R., IV Cal., 539 ; VI Cal. L. Rep., 289). 

It was thought at one time that the principle laid down Case of co- 
by their Lordships in Nogender Chunder Ghose's case 8harers - 
was applicable to the case of a co-sharer, who was com- 
pelled to pay a paramount charge on the joint property 
when such payment had the effect of protecting the pro- 
perty from sale, and the same rule was applied even in cases 
where the person who made the payment was not aco-owner, 
but one claiming under a derivative title as a lessee or 
mortgagee under some one or other of the coparceners. 
(Syed Enait Hosain v. Moddonmuni Shahun, XIV Ben. 
L. Rep., 155; Nobin Chundra Roy v. Rungo Lall Das, 
I. L. R., IX Cal. 377 ; Ram Dut Singh v. Hurruck Narain 
Singh, 1. L. R., VI Cal., 549 ; Mohesh Chunder Banerjee v. 
Ram Prossunno Chowdhri, VI Cal. L. Rep., 28 ; Deo Nun- 
don Agha v. Desputty Singh, VIII Cal. L. Rep, 210. ) But 
these cases cannot now be regarded as law, as they have 
been overruled by a Full Bench judgment of the Calcutta 
High Court, and a co-sharer must, at least on this side of 
India, rest satisfied with a personal suit for contribution, as 
any payment which may be made by him will not carry 
with it a right to a lien on the joint property. (Kinuram 
v. Hosain, I. L. R., XIV Cal., 809). A different view, 
however, has been taken both by the Bombay and the 
Allahabad High Courts. (Achut Ram Chundro Pai v. 

(c) The case arose under a Statute (Act I of 1845) which did not ex- 
pressly confer any lien on the mortgagee, a privilege which was given 
to him by Statute for the first time by the Legislature in 1869. 



318 . LAW OF MORTGAGE. 

LECTURE Hori Kamti, I. L. R., XI Bom., 313 : Lachman Singh v. 
IX. Saligram, I. L. R., VIII All., 384.) The law on the subject, 
therefore, is in a somewhat unsettled state, and must, it 
is to be feared, continue in that unsatisfactory condition 
till it is authoritatively settled by their Lordships of the 
Privy Council, or the Legislature sees fit to interfere. 
Uncertain- Coparcenery being the rule in India, it is certainly very 
[aw^ tbe desirable that the rights and liabilities of coparceners 
should be clearly defined, and yet there are perhaps few 
portions of Anglo-Indian law which are so deservedly 
open to the reproach of uncertainty. I do not refer here 
to matters which must be governed by the personal law 
of the parties, but to those altogether outside the pale 
of that law, and regulated either by statute or by the 
general principles of justice, equity and good conscience, 
which ' high-sounding phrases ' only too often mean an 
exact reproduction and not a careful adaptation of Eng- 
lish law. The Indian Legislature has, it is true, occasion- 
ally in dealing with certain special matters, embodied in 
the statute-book some of the general principles of equity, 
but the result of such fragmentary legislation has been 
not to assist but rather to embarrass our judges in apply- 
ing such principles in analogous cases not governed by 
statute law. A complete code, artistically arranged, is, 
no doubt, a triamph of legislative skill. But a sincere, 
and indeed fervent, advocacy of legislation proper as 
distinguished from judge-made law, is perfectly consis- 
tent with a wholesome distrust of the beneficial effect 
of piecemeal legislation, or as it has been sometimes 
irreverently called, legislative tinkering. I cannot find 
a better illusti'ation of what I mean than the recent 
Kinuram case f Kinura'm Das v. Muzuffer Hossain (I. L. R., XIV 
Das'scase. Cal., 809), in which a majority of the judges came to the 
conclusion that a part-owner is not entitled to a charge 
upon the share of his co-sharer for land-revenue paid by 
such co-sharer as against a purchaser whether with or with- 
out notice. It seems to me extremely doubtful, however, 
whether this conclusion would have been arrived at if the 
matter had been free from the entanglement created by the 
provisions of an Act, which, while laying down the proce- 
dure regulating sales for arrears of revenue, incidentally 
gives a right of this kind to a mortgagee, but is wholly 
silent as to the rights of a part-owner. The inference 
which was drawn by a majority of the learned judges from 



SALVAGE LIENS. . 319 

the silence of the legislature was, that a mortgagee alone LECTTTBE 
was entitled to the benefit of a lien. We must remember IX - 
that the Putnee Regulation, as well as the Bengal Tenancy 
Act, give a lien to sub-tenants, by whom the head rent is 
paid, and yet the learned judges were virtually forced to the 
conclusion that no such right can be gained if the proper- 
ty saved is not a putnee or any other description of under- 
tenure but a zemindari, or if the person who saves it is 
not a tenant, but a co-partner. I do not deny, if I may say 
so without impropriety, that the language of the Act may 
fairly suggest such an inference ; but the inference under the 
circumstances is not a very strong one. The foregoing case 
is also an illustration of the canonical authority of the 
decisions of the English Court of Chancery, although, for 
reasons which are not quite obvious, very little respect 
seems to be paid to the decisions of other courts or to 
principles underlying other systems of law, whicli at least 
deserve equal consideration. The subject is too large to 
be adequately discussed here ; but I may be permitted to 
observe that, although the system administered by equity 
in England is far more rational than that of the common 
law, it is, if not in a greater degree, at least equally with the 
latter, open to the reproach of artificiality (d ). 

But, whatever doubts may exist as to the right of a person 
interested in making a payment to claim alien, it is clear 
that a mere volunteer can claim no such right. A mere 
volunteer cannot generally say to the owner, " I have saved 
your property by the expenditure of my money, and am, 
therefore, entitled to a lien on that property for reimburse- 
ment." The person making the payment must have some 
interest in the property or some right or duty towards the 
owner impelling him as it were to make the expenditure. 
And this is the cardinal distinction between maritime sal- 
vage liens and those we are now discussing. As Lord Justice 
Bowen points out, the maritime law for the purposes of 
public policy and for the advantage of trade, imposes, in 
such cases, a liability upon the thing saved, a liability 
which is a special consequence arising out of the 
character of mercantile enterprises, the nature of sea- 
perils, and the fact that the thing saved was saved 
under great stress and exceptional circumstances (Falcke 
v. Scottish Imp. Ins. Co., 34 Ch. D., 234). The ana- 
logy is not, therefore, quite complete, because in cases 
(</) See Note A at the end of this lecture. 



320 LAW OF MORTGAGE. 

LECTURE not governed by maritime law, the owner of the saved 
Ix - . property is not under any liability to repay any money 
which may have been spent by a mere volunteer. Liabi- 
lities, it must be remembered, are not to be thrust upon 
people against their will. 

Again, a salvage lien being entitled to priority (e) over 
all other charges, the principle regulating such liens is 
subject to a further qualification introduced for the purpose 
of preventing improper preference being acquired over an 
earlier incumbrance. No lien in the nature of a salvage 
can be claimed (I am not here speaking merely of maritime 
liens), unless the parties who are immediately concerned are 
communicated with, and they refuse or are unable to make 
the necessary payment. The rule on the subject, together 
with the qualifications by which it is guarded, is well 

Mown v. illustrated by the case of Moran v. Mitu Beebee (I. L. R., 

Belbee ^ ^ a ^ 4 ' ^' * L1 wn ^ c ^ ^ ne plaintiffs sought to claim a first 
charge in respect of certain advances made by them for 
the purpose of carrying on an indigo factory, and the 
equity on which they relied was that but for the advances 
made by them, the indigo on which the defendants had 
primd facie a first charge could not have been produced, 
and that the plaintiffs were therefore entitled to a lien on 
grounds of a salvage character, which, as I have already 
stated, takes precedence of all other charges. But the 
claim of the plaintiffs was repelled, both because there was 
nothing to show that they had any interest in the pro- 
perty when they made the advances, or were otherwise 
compelled to make the payment, and also because the 
defendants, the first mortgagees, were at hand and ought to 
have been applied to in the first instance. The plaintiffs 
were absolute strangers to the estate and in the situation of 
ordinary money-lenders, who made the advances not for 
the protection of any interest of their own, but merely with 
the expectation of pecuniary gain from the bargain itself. 
I may observe that the right of the plaintiffs was also rest- 
ed on another ground, viz., the ground on which managers 
and consignees of West Indian estates are allowed a lien on 
their advances, but the Court was of opinion that such liens 
were exceptional, founded on exceptional circumstances, 
and could not be extended to the case of the plaintiffs, who 
were members of a firm in Calcutta in the habit of financ- 
ing indigo factories, the factories in their turn consigning 

(e) On the subject of priority generally, see Lecture 12, post. 



SALVAGE LIENS. 321 

the manufactured indigo for sale to the plaintiffs. In over- LKCTUBE 
ruling the contention of the plaintiffs, one of the learned IX - 
judges (Macpherson, J.) observed "the defendants, the 
Mussumats, had a first mortgage as security for a large 
sum advanced for the season's manufacture, and no refer- 
ence was made to them before the further advances were 
taken from the plaintiffs. I am wholly at a loss to compre- 
hend on what principle of equity they, who were present on 
the spot, and might at any time have been appealed to, 
can be held liable to give priority to the plaintiffs, who 
were strangers, brought in over their heads without their 
consent by the mortgagor's manager. I say this even on 
the supposition that the amount now claimed by the 
plaintiffs was absolutely necessary in order to enable the 
indigo to be manufactured, and that no indigo could have 
been made without it " (Moran v. Mitu Beebee, I. L. R., II 
Cal. 96-97.) In connection with this question, the case of Hori 
Hori Mohun Bagchee v. Grisli Chundra Bandopadhya (I Q"^" v ' 
Cal. L. Rep., 152) may also be referred to. In this case also Chundra. 
the plaintiff sought to claim priority in respect of a certain 
sum of money which was lent by him to the mortgagor 
on an ordinary bond for the purpose of paying the rent 
of the mortgaged premises. It appeared on the evidence 
that the money lent by the plaintiff was actually applied 
in payment of the rent, the tenure being thereby protected 
from sale and the mortgage security of the defendant 
preserved. It was, however, held by the Court that the 
plaintiff was not entitled to priority over the mortgagee, be- 
cause the plaintiff was a stranger to the mortgaged pre- 
mises, and therefore in a very different situation from that 
of a co-sharer or other persons having an interest in the 
property. These cases, therefore, show that if a person having 
no interest in the matter comes forward to discharge a burden 
upon the property of another, he cannot, as a rule, claim the 
benefit of a salvage lien so as to acquire preference over a 
prior mortgagee. 

We have seen that the interest which would justify 
a salvage advance may be an interest in the pro- 
perty which is saved by such advance, either as mortgagee 
or sub-tenant, or according to some authorities as part-owner 
or even as claimant by way of mortgage, lease or otherwise 
under such part-owner. In some countries it would seem 
that a mere creditor may claim a salvage lien, and that 
even, though his debt may be disputed. Indeed, a well- 
E. B. G., M. 21 



322 LAW OF MORTGAGE. 

LECTURE known English writer on the Law of Mortgage goes so 
1X1 far as to think that the equity should be allowed to any 
one who lends at the instance of an interested person 
(Fisher, 577 ; see also the cases cited in the foot-notes). It is, 
however, extremely doubtful whether our Courts will re- 
cognize any such equity in favour of a stranger or even an 
ordinary creditor. At any rate, care ought to be taken that 
the so-called equity is not made " an instrument to procure 
collusive preference over an earlier incumbrancer " (Angell 
v. Bryan, 2 Jo. and Lat., 763). The mischief may be 
guarded against by insisting, as we have already seen, upon 
the necessity of communicating, where practicable, with the 
persons more immediately concerned in making the pay- 
ment. It must not, however, be understood that a person 
occupying an independent position, as for instance, a part- 
owner or a sub-tenant is under any obligation to communi- 
cate with a mortgagee, although there may be nothing un- 
reasonable in compelling a puisne mortgagee to place him- 
self in communication with a prior mortgagee before 
making a salvage advance in respect of the mortgaged 
premises. 

Co-sharer's The lien of the co - sharer still allowed in some of our 
lien< Courts, is an instance of the recognition by our Courts of 

Justice of a right not expressly given by any statute. This, 
however, is by no means an isolated case. In the absence 
of any specific rule, the Indian Courts are bound to adminis- 
ter the principles of equity and good conscience, and thus a 
good deal of English law has not unnaturally worked its 
way into our jurisprudence. 

English l ; therefore, propose to give a short outline of the liens 
Hens.* recognised by the English Court of Chancery, pointing out 
those that have been adopted in this country. Foremost 
among them is the lien of the unpaid vendor for the pur- 
chase-money. It is thus defined by Lord Eldon in Mack- 
reth v. Symmons: "Where the vendor conveys, without 
more, though the consideration is upon the face of the 
instrument expressed to be paid, and by a receipt endorsed 
upon the back, if it is the simple case of a conveyance, 
the money or part of it not being paid as between the 
vendor and vendee, and persons claiming as volunteers, 
upon the doctrine of this Court, which, when it is settled, 
has the effect of contract, though perhaps no actual con- 
tract has taken place, a lien shall prevail in the one case, 
for the whole consideration ; in the other, for that part of 



VENDOR'S LIEN. 323 

the money which was not paid." (I White and Tudor, LECTTJBE 
L. C., 361.) If it were not now too late to do so, I Ix - 
should venture to protest against the introduction of this Mackretu 
doctrine into our system, if on no other account, at least 
on account of the number of refined distinctions which S y mmon8> 
have clustered round it in the English law, and which 
must inevitably be introduced with it. In order to ex- 
plain myself I ought to state that, in the English law, 
a vendor may waive his lien either expressly or by 
implication, and the circumstances which will be suffi- 
cient to raise an inference of waiver have given rise 
to a cloud of distinctions which are extremely refined, 
and which have produced a degree of uncertainty such 
as led Lord Eldon to say : "It would have been better 
at once to have held, that the lien should exist in no case, 
and the vendor should suffer the consequences of his want 
of caution ; or to have laid down the rule the other way so 
distinctly, that a purchaser might be able to know, without 
the judgment of a Court, in what cases it would not 
exist." It has been held in England that the lien exists 
even when the money is secured to be paid at a future day Unpaid 
( Winter v. Lord Anson, 3 Russ., 488), while the mere j"^' 3 
taking of a security does not amount to an abandonment England, 
of the lien. If, however, the vendor take a totally distinct 
and independent security, it will then become a case of 
substitution for the lien. The question, however, in all 
these cases is simply whether or not the circumstances 
show a clear and unequivocal intention to give up the 
lien a question on which there must necessarily be a great 
conflict of opinion. It is, therefore, to be regretted that 
the doctrine should have worked its way into our law. It 
rests upon grounds altogether different from those on 
which the lien of the salvor has been recognised. In the 
case of the vendor of land, it is always open to him to 
protect himself against the consequences of the fraud or in- 
solvency of the purchaser ; and if he does not choose to 
take the most ordinary precautions, he hardly deserves 
much sympathy. I need scarcely point out that the case of 
a person who is obliged to make a payment for the protection 
of his own interest, is essentially different. But there is 
another and a still more serious objection, which applies to 
all legal liens alike. They are neither agreements nor 
declarations, and are therefore wholly untouched by the 
Registration Acts. They, however, confer real rights, and a 



324 LAW OF MORTGAGE. 

LECTURE bond fide purchaser for value might be easily misled. This 
is a serious evil. We know how it is guarded against in 
England. The right being merely " equitable," the Eng- 
lish Court of Chancery, acting upon a well-known doctrine, 
will not suffer it to be enforced against a bond fide pur- 
chaser for value without notice of the lien (/ ). The doctrine 
itself is a curious illustration of the way in which the 
"g^ts an< ^ obligations of parties have been gradually 
moulded by equity. We saw that in archaic law it was 
not easy to make a secret transfer of land. The transac- 
tion must be attended with a number of solemnities which 
served to give it publicity, and the omission of any one 
of them was fatal to the validity of the transfer. It is 
hardly necessary to observe that a rigid adherence to the 
doctrine was likely to lead to considerable hardship, and 
the Court of Chancery, therefore, allowed in certain cases 
the same relief as if the plaintiff had acquired a real right, 
notwithstanding his inability to make out a complete legal 
title. But, in order to prevent injustice to third persons, 
equity allowed a peculiar defence to a purchaser for value 
who may have been misled by the presumable want of 
publicity. As a fact, in modern times, a conveyance does 
not necessarily carry with it any greater publicity than a 
contract, but the old doctrine still remains as a " survival." 
Registra- In countries in which this peculiar defence is not admit- 
*egai f ted, the same object is accomplished by the hypothec books 
mortgages, in which all transfers of real rights are carefully entered. 
In the French Code, for instance, the registration of legal 
mortgages is as compulsory as the registration of conven- 
tional securities (Code Napoleon, Book III, tit. XVIII, 
Ch. II, Sec. 4). But the Indian Statute does not permit 
the registration of such transactions. This fact of itself 
ought to induce our Courts to be cautious in the admission 

o 

of legal liens. If, however, we adopt the law as adminis- 
tered by the English Court of Chancery on this subject, 
the equitable defence open to a purchaser for value should 

(/) The above observation applies only where the purchaser has the 
legal estate. As between two merely equitable titles, the rule qui prior 
est teinpore potior est jure holds good, unless there is something to dis- 
place the prior equitable lien (MacJtreth v. Symmons, 15 Ves, 350 ; Sug- 
den, 682, Ed. 14. But see Rice v. Rice, 2 Drew, 73, where it is said 
that priority of time is the ground last resorted to, that is to say, only 
where there is no other sufficient ground of preference, and a similar 
view has been taken in other cases ; see the notes to Maekreth v. Sym- 
>nn.t, I White and Tudor. L.C., 355. See also Lecture XII, post). 



PURCHASER'S LIEN. 325 

also be admitted. So long as the registration of legal LECTUBE 
mortgages is not rendered compulsory, any other course IX - 
must necessarily lead to very great hardship. It may, no 
doubt, be said that it would be inconsistent with the logic 
of the law to hold that a real right may not be enforced 
against a subsequent purchaser ; but, as observed by an 
eminent jurist, logical antinomy is more easily to be borne 
than a rule which fails to do justice between man and man. 

In this country the lien of the unpaid vendor seems to Unpaid 
have been very much taken for granted, but, as I have vendor's 
already said, it is too late now to dispute the right (<;) India!* 
(Tremalrav v. The Municipal Commissioner of Hubli, 
I. L. R., Ill Bom., 172 ; Ramlakhan v. Baudan, I. L. R., II 
All., 711; Hariramv. Danaput,!. L. R., IXCal., 167.) Cu- 
rious attempts have occasionally been made to extend the 
doctrine, but, I need hardly add, without any success. In 
one case it seems to have been argued that a creditor oi 
the vendor was entitled to enforce the lien, because by 
mutual agreement between the vendor and the vendee, 
the purchase-money was to be paid by the vendee to the 
creditor, who claimed by virtue of that agreement a prior 
lien over a mortgage executed by the vendee. But the 
Court refused to countenance any such extension, adding 
that, although an unpaid vendor has a lien on the property, 
a creditor of the vendor cannot claim the same right (Hari- 
ram v. Danaput, I. L. R., IX Cal., 167.) In 'another 
case, a second vendee in possession attempted to resist an 
action of ejectment by a prior purchaser till the balance 
of the purchase-money was paid, the second vendee claim- 
ing to be the representative of the vendor, but I need 
scarcely say that the attempt failed (Ramlakhan Roy v. 
Baudun Roy, I. L. R., II All., 711.) A case may, however, 
arise where a third person advancing the purchase-money 
or a part of it, may claim to have the benefit of the vendor's 
lien Dry den v. Frost, 3 My. & Cr., 673 ; Neesom v. Clark- 
son, 4 Ha., 97). 

I shall now treat of some other liens recognised by the Other liens 
English law. A lien arises in favour of a purchaser for 
purchase -money prematurely paid by him. There is also a 
lien in favour of partners on the partnership estate, on dis- 
solution, in satisfaction of any demands arising out of the 
partnership business. An agent also is, in certain cases, 

0?) See aec. 55, para. (4), cl. (6) of the Transfer of Property Act. 



326 



LAW OF MORTGAGE. 



Joint- 
owner's 
lien. 



LECTURE protected by a lien on property on which he has made 
IX - advances on account of his principal. Trustees also enjoy 
a similar privilege of which creditors by whom the advances 
may have been actually made may be entitled to avail 
themselves on the principle of subrogation (In re Johnson, 
15 Ch. D., 553.) A bond fide possessor may also sometimes 
claim the right in respect of any outlay made by him (Cooke, 
p. 421). As a general rule, however, a person is not entitled 
to a charge, simply because he has laid out money on the 
property of another. But where the person who makes 
the outlay is interested in the property, but not as agent 
or trustee, the question, as we have already seen, presents 
considerable difficulty. According to the English common 
law, one tenant in common of a house, who expends money 
on ordinary repairs, has no right of action against his co- 
tenant for contribution (Singh v. Dickson, 12 Q. B. D., 
194 ; S.C. on appeal 15 Q. B. D., 60.) And even in equity, 
which could not always disentangle itself from the common 
law, a lien is only allowed in certain cases. 

The law on the subject is thus stated by Story : " An- 
other species of lien is that which results to one joint-owner 
of any real estate, or other joint-property, from repairs 
and improvements made upon such property for the joint 
benefit and for disbursements touching the same. This 
lien, as we shall presently see, sometimes arises from a 
contract, express or implied, between the parties, and some- 
times it is created by courts of equity upon mere princi- 
ples of general justice, especially where any relief is sought 
by the party, who ought to pay his proportion of the 
money expended in such repairs and improvements, for in 
such cases the maxim well applies " Nemo debet locuple- 
tari ex alterius inconiinodo." (Story's Equity, 1234.) 

But the doctrine of contribution in equity is larger than 
it is at law ; and in many cases repairs and improvements 
will be held to be not merely a personal charge, but a lieu 
on the estate itself. Thus, for example, it has been held 
that if two or more persons make a joint-purchase, and 
afterwards one of them lays out a considerable sum of 
money in repairs or improvements and dies, this will be a 
lien on the land and a trust for the representatives of him 
who advanced it. (Story's Equity, 1236.) 

In many cases of this sort, the doctrine may proceed 
upon the ground of some express or implied agreement as 
to the repairs and improvements between the joint-pur- 



Doc trine 
of contri- 
bution. 



Lien for 
repairs. 



OTHER LIENS. 327 

chasers and an implied lien following upon such an agree- LECTUBE 
ment. But courts of equity have not confined the doc- IX - 
trine of compensation or lien for repairs and improvements 
to cases of agreement or of joint-purchasers. They have 
extended it to other cases, where the party making the 
repairs and improvements has acted bond fide and innocent- 
ly, and there has been a substantial benefit conferred on the 
owner, so that ex cequo et bono he ought to pay for such 
benefit. Thus, where a tenant for life under a will has gone 
on to finish improvements permanently beneficial to an 
estate, which were begun by the testator, courts of equity 
have deemed the expenditure a charge for which the ten- 
ant is entitled to a lien. So, where a party lawfully in 
possession under a defective title has made permanent 
improvement, if relief is asked in equity by the true owner, And or 
he will be compelled to allow for such improvements. So, improve- 
money bond fide laid out in improvements on an estate by meuts< 
one joint-owner will be allowed on a bill by the other if 
he ask for a partition. So, if the true owner stands by, and 
suffers improvements to be made on estate without notice 
of his title, he will not be permitted in equity to enrich 
himself by the loss of another ; but the improvements will 
constitute a lien on the estate. For, it has been well said : 
" Jure naturae sequum est neminem cum alterius detri- 
mento et injuria fieri locupletiorem." A fortiori this doc- 
trine will apply to cases where the parties stand in a fidu- 
ciary relation to each other ; as, where an agent stands by, 
and without notice of his title, suffers his principal to spend 
money in improvements upon the agent's estate. (Story's 
Equity, 1237.) On the subject of liens generally, see 
Burge's Foreign and Colonial Law, Vol. Ill, pp. 314 377. 

English equity thus proceeds in a very guarded manner, Character 
the explanation of which must be sought in the history g^ 
of the rise and growth of the equitable jurisdiction of the liens. 
Court of Chancery. It seems to me that the person who 
lays out money in repairing a house to which he is enti- 
tled in common with others has a much stronger equity in 
his favour than the unpaid vendor, and yet, although a 
lien arises in favour of the latter, it is denied to the 
former. In India properties are very frequently held in 
coparcenary, and although the remedy may in one sense 
be said to be in the hands of the coparceners themselves, 
a partition, as we all know, cannot be had without great 
delay and expense to the parties. It is, therefore, satis- 



328 



LAW OF MORTGAGE. 



equity in 
England. 



LECTURE factory to notice that the question in this country has been 
IX - decided on broader principles than those recognised by 
English equity, which is often merely a pale reflection 
of Roman law (Mahomed v. Shaista Khan, II All. H. C. Rep., 
248; Buzlool Hossein v. Gunput, XXV Suth. W. R., 170). 
We must remember that, although equity is much more in 
accordance with common sense than the common law, and 

Growth of although some of its doctrines are still refining themselves, 
there are parts which disclose to the student, if I might 
borrow an expression from physiology, unmistakable evi- 
dence of ' arrested growth.' This is very clearly pointed 
out by Sir Henry Maine in a passage in his Ancient Law in 
which he draws an interesting parallel between Roman and 
English equity. " It would be wearisome," says the learned 
author, " to enter on a detailed comparison or contrast of 
English and Roman equity ; but it may be worth while to 
mention two features which they have in common. The 
first may be stated as follows : Each of them tended, and 
all such systems tend, to exactly the same state in which 
the old common law was when equity first interfered with 
it. A time always comes at which the moral principles 

Sjr Henry originally adopted have been carried out to all their legi- 
timate consequences, and then the system founded on them 
becomes as rigid as unexpansive, and as liable to fall behind 
moral progress as the sternest code of rules avowedly legal. 
Such an epoch was reached at Rome in the reign of Alex- 
ander Severus ; after which though the whole Roman world 
was undergoing a moral revolution, the equity of Rome 
ceased to expand. The same point of legal history was 
attained in England under the Chancellorship of Lord 
Eldon, the first of our equity judges, who, instead of enlarg- 
ing the jurisprudence of his Court by indirect legislation, 
devoted himself through life to explaining and harmonising 
it. If the philosophy of legal history were better under- 
stood in England, Lord Eldon's services would be less 
exaggerated on the one hand and better appreciated on the 
other than they appear to be among contemporary lawyers. 
Other misapprehensions, too, which bear some practical fruit, 
would perhaps be avoided. It is easily seen by English 
lawyers that English equity is a system founded on moral 
rules ; but it is forgotten that these rules are the morality 
of past centuries not of the present that they have 
received nearly as much application as they are capable of, 
and that though, of course, they do not differ largely from 



Maine's 
remarks. 



CIVIL LAW. 329 

the ethical creed of our own day, they are not necessarily LECTUUE 
on a level with it. The imperfect theories on the subject Ix - 
which are commonly adopted have generated errors of 
opposite sorts. Many writers of treatises on equity struck 
with the completeness of the system in its present state, 
commit themselves expressly or implicitly to the paradoxi- 
cal assertion that the founders of the Chancery jurispru- 
dence contemplated its present finality of form when they 
were settling its first basis. Others again complain and 
this is a grievance frequently observed upon in forensic 
arguments that the moral rules enforced by the Court of 
Chancery fall short of the ethical standard of the present 
day. They would have each Lord Chancellor perform pre- 
cisely the same office for the jurisprudence which he finds 
ready to his hand which was performed for the old common 
law by the fathers of English equity. But this is to invert 
the order of the agencies by which the improvement of 
the law is carried on. Equity has its place and its time ; 
but I have pointed out that another instrumentality is 
ready to succeed it when its energies are spent." (Maine's 
Ancient Law, pp. 68 70.) 

I trust I shall be excused for venturing to suggest that Appika- 
the caution thus indirectly conveyed is not perhaps alwa3*s *i on ,? f . 

' j v T j- j -u i- j. English 

borne in mind by Indian judges, who seem sometimes to law in 
forget that equity in this country has not yet crystallised India, 
into system, but possesses all the fluidity which charac- 
terised it in England before it hardened into the shape which 
it wears in our day. There is very little danger of any 
rash experiments being made under the name of equity 
and good conscience, as the professional learning, and I 
must add, the professional prejudices of the English law- 
yers, who preside over the superior courts in India, will 
always prevent any hasty or unnecessary departure from 
the English law. 

The principles of justice, equity, and good conscience, Lender's 
however, so long as they do not harden into system, are heu * 
often extremely vague. They should, therefore, be applied 
with very great caution. Various liens, for instance, are 
recognised by the civil law and the continental codes, 
which find no place in the English system. The lien of the 
lender who advances money for the purchase of land, or 
for repairing a building, or of the architect or labourer 
employed in the construction of any works, is not recog- 
nised by the English Court of Chancery ; and yet it would 



330 



LAW OF MORTGAGE. 



Solicitor's 
lien. 



LECTUEB be difficult to deny that the creditor in the one case, and 
IX< the architect in the other, have at least as stroug an 
" equity " in their favour as the unpaid vendor (Code 
Napoleon, Book III, tit. XVIII, Ch. II.) The truth 
is, the principles of justice, equity, and good conscience 
are at best but an uncertain guide, and not unfrequently 
wear an appearance of vagueness, which, it must be con- 
fessed, is rather bewildering to the student of Indian law. 
Indeed, it may fairly be doubted whether our courts ought 
not to confine the right to a legal mortgage only to those 
cases in which, as in the case of the salvor, the person 
claiming the right could not have protected himself by an 
express agreement. In every other case the parties may 
be safely left to take the consequences of their own want of 
caution. 

Several other descriptions of equitable liens are also 
recognised by the law. A solicitor, for instance, has a 
lien on the fruits of any judgment recovered by him, a 
privilege, I may add, denied to other classes of practition- 
ers. But the lien will not be allowed to override the right 
of a party to a set-off, at any rate where the mutual 
payments are under the same decree (Baikesserbai v. 
Narranji Walji, I. L. R., IV Bom., 353 ; Brij Nath v. 
Juggernath, I. L. R., IV Cal., 742.) A solicitor, however, 
who discharges himself forfeits his lien (In re McCor- 
Jdndale, I. L. R., VI Cal., 1 ; Cf. In re Wadsworth, 34 
Ch. D., 155, where the solicitor at the time the fund was 
recovered was held entitled to priority over the solicitor 
who had conducted the action, but had been discharged 
before the trial.) In certain cases servants and labourers 
have a lien for their wages (In the matter of the Indian 
Companies Act 1866, II Ind. Jur., N. S., 180 ; II Ind. Jur., 
N. S., 257.) Maritime liens form also a very important 
class of securities, but they are of very little practical im- 
portance to the Indian lawyer. (See on the subject Fisher, 
pp. 166171 ; see also Coote, pp. 604-606.) 

Distraint. In this country, generally speaking, the land-revenue is 
a paramount charge, and the sale of a tenure for rent has 
also in many cases the effect of sweeping away all incuin- 
brances ; but I do not think that it would be quite correct 
to say that there is a lien in such cases. A modified right 
in favour of the landlord is, however, recognised by the legis- 
lature under the name of distraint, and this is strictly a legal 
lien, and would apparently take rank above all other charges. 



CREDITOR'S LIEN. 331 

I shall now treat of one or two cases in which it is some- LECTURE 
times thought that a lieu exists. It is sometimes said that IX - 
a Mahommedau widow has a lien on the estate of her hus- N o~iie7f r 
band for dower due to her. The question was very fully dower iu 
discussed in the case of (Amanee v. Mir Meher AH, J Iahomme - 
XI Suth. W. R., 212), and the Court, after a review 
of all the authorities, came to the conclusion that the 
widow has no special charge on the property, but ranks 
pari passu with other ordinary creditors. (See also Shah 
Enayet Hossain v. Syud Romzan, X Suth. \V. R., 216.) But 
dower, like every other debt, must be paid before the heirs 
are entitled to take anything, and the authorities show 
that a Mahommedan widow, in possession of her husband's 
estate, upon a claim of dower, has a lien upon it as against 
those entitled as heirs, and is entitled to the rents and 
profits till the claim of dower is satisfied. (See Macnagh- 
ten's Precedents, case 24, p. 275. WomatuL Fatima v. 
Mirunnissa, IX Suth. W. R., 318, reported also in VIII 
Suth. W. R., 51.) 

A similar right is sometimes put forward on behalf of No lien of 
the creditor of a deceased Hindu, but it is now conclusive- 
ly settled that a creditor has no lien on the assets in the 
hands of the heir, and cannot, therefore, reach any property 
which may have been transferred by the heir in good faith 
to a third party. Sir Thomas Strange, indeed, in his book 
on Hindu law, says, that " debts are a charge on the inher- 
itance, and that they follow the assets into whatsoever 
hand it comes." (Strange's Hindu Law, Vol. I, p. 166.) 
And the learned author cites the very high authority of 
Colebrooke in support of his opinion. (Strange's Hindu 
Law, App., p. 282.) There is also the text of Katya- 
yana : " If any debts exist against the father, his son 
shall not take possession of his effects. They must be 
given to his creditors." (Stokes's Vyabahara Mayukha, 
p. 122.) Our Courts, however, have laid down a different 
doctrine, although it may fairly be doubted if this is not one 
of the many instances in which English lawyers have un- 
consciously introduced the doctrines of their own law, 
moulded by the commercial necessities of the country into 
a system comparatively archaic, and not shaped by such 
economic considerations. The Sudder Dewany Adawlut, 
presided over by Judges not so familiar with English law, 
adhered to the doctrine laid down by Strange and Cole- 
brooke. But the law has been differently interpreted in 



332 LAW OF MORTGAGE. 

LECTUBE recent decisions. In the case of Zaburdust Khan v. Inder- 
IX - man (Agra F. B., 71), the Court, in giving judgment, 
observed: "In our judgment the real test to be applied 
in deciding the issue of law raised is to be found in the 
answer to the question to whom does the property pass 
on the death of the deceased ? Does it pass immediately 
and entirely to his heirs, or is the normal devolution inter- 
rupted, so that the whole or a portion of the estate suffi- 
cient to discharge his debts, vests, as if by hypothecation, 
in the creditors, and does only the residue pass to the heir ? 

Zaburdust " "We can find no authority for the latter proposition ; 

case."* nor has any other text been cited in support of it than 
that from Katyayana referred to by the Division Bench. 
Although Sir T. Strange enumerates debts among the 
charges on the inheritance, he nowhere expresses himself 
to the effect, that any interest in the inheritance vests in 
the creditor ; on the contrary, the language used by him 
rather shows that the whole estate of the deceased's 
ancestor passes to his heirs, affecting them with a liability 
for the debts of the ancestor to the extent of the assets 
received by them. The heirs may, if they please, avoid 
this liability by disclaiming the estate, but into the hands 
of whatever volunteer it conies, the liability attaches on 
him ; and so long as the estate remains in the hands of the 
heirs or any other volunteers, so long does it constitute 
a fund, to which the creditor is entitled to have resort for 
satisfaction of his claim. This is in our opinion the cor- 
rect interpretation of the dictum that debts follow the 
assets into whatsoever hands they come. We have exa- 
mined the authorities referred to by Sir T. Strange on 
this point, and can find nothing in them which warrants 
any stronger position in favour of creditors than that which 
we have expressed above. The text of Katyayana may, 
at first sight, seem to justify the contention that the whole 
estate of a deceased ancestor does not pass directly to the 
heirs ; but that there rests in them only the residue after 
satisfaction of the debts. But this text must be read in 
connection with other texts of writers of high authority 
on Hindu law; and so reading it, we are of opinion, that 
the proper construction of it is to hold, that it declares 
that the resulting benefit to the heirs from the succession 
cannot be greater than the surplus of assets over liabili- 
ties ; not that the estate does not altogether and absolutely 
vest in the heirs. Numerous texts may be referred to, 



ATTACHMENTS. 333 

which indicate a power in the heirs to deal with the whole LECTURE 
estate before satisfaction of the debts. The very fact that IX - 
they may sell it to satisfy debts shows an ability to make 
a good title to the whole of it. 

" The construction of the texts of Katyayana in the 
sense contended for on behalf of the appellant is therefore 
untenable." (See also Annopurna Dassee v. Ounganarain 
Pal, II Suth. W. R, 296 ; Jamiyatram Ram Chunder v. 
Parbhu Das Hathi, IX Bom., 116; XII Bom., 78 ; compare 
N. W. P., 1859, p. 23 ; Mad., S. D. A., Vol. I, p. 166; Green- 
der Chunder v. Mackintosh, I. L. R., IV Cal., 877.) 

It would seem that although a Hindu widow has, in a widow's 
certain sense, a lien on the estate of her deceased husband liei ; for 
for maintenance, the charge cannot be enforced against a 
purchaser for value without notice of the lien. At any 
rate the widow cannot seek to charge the estate in the 
hands of a purchaser without showing that there is no 
property of her deceased husband in the hands of his heirs 
(Adhiranee Narain Kumaree v. Shona Malee, I. L. R., I 
Cal., 365 ; see also VIII B. L. R, 225 ; IX B. L. R, 11 ; 
XII Bom., 69 ; compare II Agra, 42 ; IV Moo. Ind. App., 
246 ; I AIL, 191.) 

A notion also seems to prevail that in this country imiigo 
there is a lien on an indigo factory, or at least upon the hens- 
produce of the factory for the price of seed supplied to it. 
But the proposition rests on no authority, and was express- 
ly negatived in the case of Monohur Dass v. McNagli- 
ten (I. L. R, III Cal., 231.) It is, however, curious to 
observe that the Code Napoleon recognizes a lien in the 
nature of a privileged hypothecation for sums due for seed 
corn or for the expenses of the harvest of the year on the 
value of such harvest. (Code Napoleon, Art. 2102.) 

I now come to judicial liens or attachments. Now, an Judicial 
attachment under the Civil Procedure Code may be either hens - 
before or after judgment ; the process being intended in both 
cases to guard against the alienation of the property by 
the defendant. It does not fall within the scope of the 
present lecture to discuss all the various points in connec- 
tion with attachments. I shall confine myself only to the 
operation of an attachment under the code. Now, an attach- 
ment operates from the moment that the process is executed 
as a charge on the property, the judgment itself not having 
the effect of creating in this country a lien on the property 
of the judgment-debtor. But, in order to have the benefit 



334 LAW OF MORTGAGE. 

LECTURE of an attachment, the provisions of the Procedure Cede 
IX - must be carefully followed. In one case in which the 
notice of attachment was not fixed up in the Court-house, 
or in the office of the Collector, the Court thought that 
an alienation made by the debtor could not be avoided by 
the creditor. Mr. Justice Macpherson, in giving judgment, 
observed : 

inderchand " The objection is by no means a technical objection. 

Babu's The affixing the notice in the Court-house and in the office 
se< of the Collector is a far more certain means of giving 
information to tlie parties immediately interested than the 
process of reading the notice aloud on the land or on some 
place adjacent to it. A man can always arrange so as to 
keep himself acquainted with all notices fixed up in the 
Court of the Judge or the Collector of a District. But 
there can be no certainty that he will happen to hear, or 
to be made acquainted with, orders which are merely read 
aloud on his land or on some place adjacent to it. In the case 
before us, it is not proved that the judgment-debtor was 
in personal possession of the lands which were the subject 
of attachment, and there is nothing whatever to show or 
to lead to the presumption that he was acquainted with 
the fact of the order of attachment having been read aloud 
by the peon who was sent to attach the property. The 
probability of the judgment-debtors having known that the 
attachment had been issued, would have been far stronger, 
if the order had been fixed up in the Court-house or in the 
office of the Collector. 

" Section 240 says that alienations after attachment are 
to be void, if the attachment or the written order ' shall 
have been duly intimated and made known in manner 
aforesaid.' The words ' manner aforesaid ' relate to the pro- 
visions of Section 239, and when two out of the three 
methods prescribed by that section for intimating and 
making known attachments have been wholly omitted, it 
cannot possibly be said that the order of attachment was 
duly intimated and made known within the meaning of 
Section 240. " (Inderchund Bahoo v. The Agra Bank, X 
Suth. W. R., 264; Dev endra Nath Saniol v. Torak Ghunder 
Bhattacharjee, andltamkumar Ghose v. Baikontnath Saniol, 
X Cal., 281; I. L. R., VII Gal., 107.) Again, there must 
be a debt in existence to support an attachment. Thus 
where an attachment was issued under an ex parte decree, 
which was afterwards set aside on an application for a 



ATTACHMENTS. 335 

new trial, but was subsequently restored, it was held that LECTURE 
the attachment previously issued had not the effect of IX. 

invalidating an intermediate sale. (Jagat v. Tulsiram I 

Ben. L. Rep., 71, A. C.) 

An attachment under the code constitutes a perfect real Attach- 
security. The judgment-debtor may not alienate the pro- ment . b - 
perty, the purchaser under the execution following upon men/. Udg " 
such attachment not being bound by any transfer made by 
the debtor subsequently to the attachment. What passes 
to the purchaser is, therefore, not the rights and interests 
of the debtor as they stand at the time of the sale, 
but the rights and interests of the debtor as they stood 
at the time of the attachment. The alienation will, 
however, be void only as against claims enforceable under 
the attachment. It must, however, be borne in mind 
that an attachment does, to a certain extent, enure to the 
benefit of all the judgment-creditors. Thus, suppose A 
attaches property belonging to his judgment-debtor worth 
5,000 rupees, and that the debt due to A is only 1,000 
rupees. Now, if the debtor should sell the property to a 
third person before it has been attached by any other cre- 
ditor, and the property should eventually be sold under 
an execution, the balance of the purchase-money will not 
be paid over to the purchaser, but will be distributed 
among such of the other creditors as may have taken out 
execution prior to the order for distribution. (Section 295, 
Act XIV of 1882.) It should be observed that the mere 
fact that a particular attaching creditor is paid out of 
the proceeds would not avoid an incumbrance if the sale 
did not take place under that attachment. (Guruprasad v. 
Binda, IX Ben. L. Rep., 180; Umcsh Chunder Roy v. Raj- 
bulbh Sen, I. L. R., VIII Gal., 279; Hazir Gazi v. Sona- 
monee Dassee, I. L. R., VI All., 33. 

In conclusion, it is necessary to observe that, if an attach- striking 
ment has been permanently struck off, and a new attach- 
ment has become necessary, a conveyance which is execut- 
ed between the two attachments will be valid (Govindo 
Sing v. Mir Mushun Ali, S. D. A., 1855, p. 244.) A 
question of much greater difficulty arises when the con- 
veyance has been executed while the first attachment was 
subsisting. Does such a conveyance become valid by rela- 
tion, or is it void against the execution-creditor and those 
claiming under him. In the case of Puddomoney against 
Roy Muthooranath Chowdry, the Privy Council observ- 



336 



LAW OF MORTGAGE. 



LECTURE ed : " It seems to their Lordships that generally where 
IX. the party prosecuting the decree is compelled to take out 
another execution, his title should be presumed to date 
from the second attachment. Their Lordships do not mean 
to lay down broadly that in all cases in which an execu- 
tion is struck off the file, such consequences must follow. 
The reported cases sufficiently show that in India the strik- 
ing an execution proceeding off the file is an act which 
may admit of different interpretations according to the 
circumstances under which it is done, and accordingly their 
Lordships do not desire to lay down any general rule which 
would govern all cases of that kind; but they are of 
opinion that when, as in this case, a very long time has 
elapsed between the original execution and the date at 
which it was struck off, it should be presumed that the 
execution was abandoned and ceased to be operative, unless 
the circumstances are otherwise explained (Puddomoney 
Dassee v. Roy Mathuranath Chowdry, XX Suth. W. R., 133, 
over-ruling Ramchurn Loll v. Jhahbur Sahoo, XIV Suth. 
W. R., 25.) 

NOTE A. 

It is said by Mr. Justice Wilson in the case of Klnuram Das, I. L. R., 
XIV Cal.. 809, that the doctrine of salvage liens, acted upon in some Irish 
cases, has been authoritatively rejected in England by the Court of Appeal 
in Fa lelte v. Scottish Imperial Insurance Company (34 Ch. D,, 234.) It 
seems to me. however, with great deference, that all that the case lays 
down is that the owner of the ultimate equity of redemption is not entitled 
to claim a charge in the nature of salvage. Another principle, as I 
understand it, involved in the case is, that a person who officiously 
makes a payment, although such payment may have the effect of saving 
another's property, is not entitled to a lien in the absence of any 
acquiescence or lying by on the part of the owner or of any 
request, either express or implied, in the sense of the English law, and 
the observations of the Court with regard to the inapplicability of the 
principle of maritime salvage liens were made with reference to 
the facts of the case. This is shown as well by the arguments of 
counsel as by the judgments of the learned judges, who took part in 
the decision. For instance, it was argued for the appellant that in 
order to establish any claim, the person who made the payment must 
prove that he had an interest in the policy or that he was requested 
to make the payment. It was said that a man cannot by paying a 
debt due from A B without any request from A B make himself 
A B's creditor, and a fortiori he cannot by so doing give himself a 
lien on property. And Lord Justice Cotton, in giving judgment, said : "If 
here there had been circumstances to lead to the conclusion that there 
was a request by Falcke that this premium should be paid by Emmanuel, 
then there would be a claim against Falcke or his representative for 
the money ; and I do not say that there might not be a lien on the 
policy." page 241. So also Lord Justice Boweii says : " The general prin- 
ciple is, beyond all question, that work and labour done or money expend- 
ed by one man to preserve or benefit the property of another do not, 
according to English law. create any lien upon the property saved or 



Salvage 
liens in 
England. 



Falcke's 
case. 



SALVAGE LIENS. 337 

benefited, nor, even if standing alone, create any obligation to repay the LECTURE 
expenditure," (p. 248). Further on, the learned Judge, after pointing out IX. 
that there was no express or implied request to Mr. Emmanuel to make the 
payment, adds : " So much therefore for the idea of a lien or even of a right 
to be repaid this sum at common law " (p. 250). Similarly Lord Justice 
Fry says : " I exceedingly doubt whether a mere request by a mortgagee 
to his mortgagor, though it might give rise to an action for the recov- 
ery of the sum paid, would create a lien as against the mortgagee upon 
the property saved by the payment, but it is not necessary to discmts that 
point " (p. 252). I may add that the true distinction between a maritime 
salvage and the case before the Court to which it was attempted to be 
likened, consists in the fact that in the former it is not at all necessary 
that the person who claims the lien should be under any compulsion to 
make the payment. In this country, for instance, if a third party volun- 
tarily pays the revenue, he will not be entitled to recover the money from 
the owner personally or from the property itself, on grounds of a salvage 
character, but the case is very different where the payment is made by a 
person who has an interest of his own to protect, in which case a request 
will be implied by the English law, although it would be, perhaps, more 
scientific to say that the obligation here arises out of a quasi-contract. 
In some cases in England, however, premiums paid by persons claiming 
but not really possessed of any bond fide interest in the policy or even by 
the mortgagor himself have been treated as salvage payments. (See the 
cases cited in Falckev. Scottish Imperial Insurance Company ; also White 
and Tudor's Leading Cases, vol. II, p. 1242). But these cases can scarcely 
now be regarded as law. And the same observation will to a certain 
extent apply to the case of Grinder Chimder v. Mackintosh (I. L. R., IV 
Calc., 897) where the Court said that as the avowed purpose for which the 
mortgage in that case was made was to raise money for payment of the 
government revenue, the payment of which would be in the natnro 
of insurance of the mortgage property, the mortgagee was entitled to 
priority. 

I may mention that English equity does in some cases unquestionably 
allow a lien to a part-owner or other person having a limited interest in. 
respect of repairs and even improvements made by them, and there seems 
to my mind to be no difference in principle between an outlay for repairs 
and one for payment of head rent, except perhaps that in the latter 
case the equity is much stronger. (See the cases cited and reviewed in 
the judgment of Mr. Justice Mitter.) In addition to these cases, we may 
refer to Exp. Linden (I. M. D. & D. 428) in which it was held that 
where a man agrees to sell his estate and to lend money to the pur- 
chaser, he will have a lien for the advances so made as well as for the 
purchase-money. (Cf. Neesom v. Cla^kson, 4 Ha. 97 ; Harris v. Poyner, 
I Drew, 174, XVI Jur., 880; Macnolty v. Fitzherbert, III Jur. N. S. 1237, 
M. R. ; Barrington's Sett, 1 Jo. and H. 142 ; 6 Jur. N. S. 1073, where the 
tenant for life was allowed for repairs and improvements). I may add 
that the principle has now been to a certain extent adopted by tho 
English Legislature (8 and 9 Viet., c. 56, 9 and 10 Viet., c. 101 and 
1 0, and 1 1 Viet. c. 1 1 and 113). A lien has also sometimes been allowed in 
favour of a tenant in common for payments in respect of the estate. 
(Doddington v. Hallett, 1 Ves. S. 497 ; Exp. Leslie 3 L. J. N. S. Bky. 4 : 
Harrison Exp., 2 Rose 76 ; Laltc v. Gibson, 1 Eq. C. A. B. R. 291). Indeed, 
the English Court of Chancery has sometimes gone so far as to recognise a 
lien in favour of bond fide possessors for permanent improvements made 
by them (Neesom v. Clarkson, 4 Ha. 97 ; Thome v. Newman, Finch 38. 
See Swan v. S., 8 Pri. 518 ; Ludloio v. Gray all, 11 Pri. 58 ; Unity Sank v. 
King, 25 Beav., 72 ; 4 Jur. N. S. 470). The lien of consignees of West 
India Estates is a recognition of an analogous right which was no 
doubt originally forced on the English courts of equity by reason of 

R. B. Q., M. 22 



338 



LAW OF MORTGAGE. 



Case of 

joint-ten- 

ants. 



LECTTJBE ^ e difficulty of carrying on cultivation in the colonies without the 
JX. assistance of consignees in England. (3 Surge's Foreign and Colonial 
_ j. Law, 359. Coote's Mortgage 422. Fisher's Mortgage 148). On a similar 
principle a salvage lien may be claimed by a manager of certain under- 
takings by reason as well of the perishable nature of the works as of 
the exigencies under which they are carried on. (Fisher's Mortgage 
147). I may add that, although mere co-owners have no such lien as ia 
enjoyed by co-partners in the English Law, a part-owner of a ship has 
a right to have the gross freight applied in the first instance in pay- 
ment of the expenses incurred in earning it. (Lindley on Partnership, 
pp. 683-84.) 

I ought to mention that, to my mind, not only is the joint- 
tenant or other limited owner entitled to a lien, but that seems 
^0 be the only appropriate remedy, as the other owners are not bound 
to keep the property against their will, and indeed this is one of the 
arguments which was employed by the Court of Appeal in Leigh v. 
DicTison (15 Q. B. D., 60), where the Master of the Rolls, in holding 
that one tenant in common of a house who expends money on ordinary 
repairs has no right of action against his co-tenant for contribution, 
says: "If the law were otherwise a part-owner might be compelled 
to incur expense against his will ; a house might be situate in a 
decaying borough, and it might be thought by one co-owner that 
it would be better not to repair it, p. 65. This objection, however, 
which applies only to a personal action for contribution, will be obviated 
if you restrict the part-owner to proceedings in rem. 

It seems that in the Civil Law and the systems founded on it, a lien 
may be claimed by a person who advances money for the purpose of 
repairing or rebuilding a house. It may also be claimed in respect of 
expenditure incurred by a person possessing only a limited estate. 
(Burge's Foreign and Colonial Law, Vol. Ill, pp. 346377.) 



LECTURE X. 



Subrogation Application of rule Rights of puisne incumbraiicers Rights of 
surety Entitled to benefit of securities held by creditor How far discharged 
by relinquishinent of security Security not relinquished by payment Rule 
of English law Followed in India Co-debtors How far entitled to benefit 
of securities Purchasers of mortgagor's rights redeeming a mortgage, how 
far entitled to benefit of subrogation Other cases illustrative of the rule 
Contribution Principle on which founded Doctrine followed in India 
Marshalling of securities Rule of English law Adopted by our Courts 
Distinction between purchasers and incumbraiicers Notice immaterial in the 
case of a mortgage. 

IN the last lecture I treated of the various circumstances Subroga- 
under which a lien is created by operation of law, in- tlon< 
dependently of the assent of the parties between whom 
the relation is created. In the present lecture I propose 
to discuss a class of securities which, although distinguish- 
able from the class considered in the last lecture, have 
yet some features in common with them. I refer to cases 
in which a person, by whom an incumbrance is discharged, 
is sometimes allowed to stand in the place of the mort- 
gagee, and to avail himself of the security in precisely the 
same way as if the mortgagee had assigned it to him. 

The doctrine of subrogation, as it is called, rests upon ^ n equit- 
the plainest principles of justice and equity, and is recog- able priu- 
nized in almost every system of law. You must not, how- Clple> 
ever, suppose that every person who discharges the mort- 
gage-debt is entitled to the benefit of the security held by 
the mortgagee. As a rule, in the absence of an assignment 
of the security, the person by whom the debt is discharged 
has no right to avail himself of it. The discharge of the 
debt extinguishes the security, and the doctrine of subro- 
gation or involuntary assignment is, in reality, an exception 
to this rule. 

We have seen that every person who is entitled to redeem Appiica- 
acquires, on redemption, the right to stand in the place of tloQofrule - 
the mortgagee, and that it is not necessary that he should 
obtain an actual assignment of the mortgage in order that 
he may avail himself of the security. But there are other 
cases also in which the discharge of a debt secured by a 



340 LAW OF MORTGAGE. 

LECTURE mortgage is followed by the same result. A surety who pays 
x> the debt due from his principal is entitled to enforce any 
security against the debtor possessed by the creditor. " A 
surety," to use the language of Sir S. Romilly, in his argu- 
ment in Craythorne v. Swinburne, " will be entitled to 
every remedy which the creditor has against the principal 
debtor to enforce every security and all means of payment ; 
to stand in the place of the creditor, not only through the 
medium of contract, but even by means of securities en- 
tered into without the knowledge of the surety ; having a 
right to have those securities transferred to him, though 
there was no stipulation for that ; and to avail himself of 
all those securities against the debtor." The surety is en- 
titled to the benefit of the securities, although he may not 
have been aware of their existence, and although they may 
have been taken by the creditor after the contract of surety- 
ship has been entered into (Sections 140-141 of the Con- 
tract Act; consider Forbes v. Jackson, 19 Ch. D., 615, 
and cases cited therein). It seems that the fact that the cre- 
ditor has made further advances on the security will not 
affect the right of the surety on paying off the original debt 
to claim an assignment (Forbes v. Jackson, 19 Ch. D., 
615, overruling Williams v. Owen, 13 Sim., 597.) Indeed 
in some cases the effect of making further advances might 
be practically to discharge the surety altogether. (Mutual 
Life Assurance Co. v. Longby, 32 Ch. D., 460; Beevor v. 
Luck, L. E., 4 Eq., 537.) The creditor is not entitled to 
apply the security to the discharge of any other debt than 
that guaranteed by the surety. (Pledge v. Buss, Johns., 
663.) But when the security is given after the contract 
of suretyship for the debt guaranteed by the surety as 
well as for other debts of the principal, the creditor is not 
bound to apply the proceeds either preferentially in payment 
of that debt or pari passu in payment of all the debts, there 
being no principle of law or equity by which the rights 
of the creditor can be so controlled in favour of the surety. 
(Bank of Bengal v. Radhakissen, III Moore Ind. App., 19.) 
I may, here mention that, as between themselves, sureties 
are entitled to the benefit of all securities which may have 
been taken by any one of them to indemnify himself. 
But it seems the surety is only entitled, as against the 
creditor, to the securities given by the debtor, not those 
given by the co-sureties. (Duncan v. N. W. Bank, 11 Ch. 
D., 88.) (As to marshalling against sureties and on the 



Oozter Alt, 



RIGHTS OF SURETIES. 341 

rights of sureties generally, see DeColyar on Guarantees, LECTURE 
pp. 296-298.) 

In a late case in the Calcutta High Court, the ques- ffeera Lall 
tion arose whether or not a surety, by whom the debt had 
been paid, could proceed against the original debtor upoi 
the instrument itself by which the debt had been created. 
The facts were shortly these : the plaintiff brought a 
suit in the nature of an action of ejectment upon a mort- 
gage, which had been regularly foreclosed. The defence 
was that, prior to the mortgage under which the plaintiff 
made title to the property, the debtor had borrowed money 
from a third person on the security of that very property, 
and that the defendant was his surety on that occasion. 
The money not having been repaid by the principal debtor, 
the defendant paid the debt, and the creditor, at his in- 
stance, brought an action against the debtor on the mort- 
gage bond ; and in execution of the decree obtained by 
him, the property in dispute was sold and purchased by 
the defendant. In this state of facts it was contended for 
the plaintiff that the payment by the surety discharged the 
debt, and consequently extinguished the security ; and that 
the defendant under his purchase acquired only the rights 
and interests of the debtor as under an ordinary execution, 
and that, as the plaintiff's mortgage was prior in date to the 
defendant's purchase, the facts stated in the defence were no 
answer to the plaintiffs suit. This contention was, how- 
ever, overruled, and Mr. Justice Markby, in giving the judg- 
ment of the Court, said: " We must decide the question by 
analogy of the law of other countries ; and it appears to us 
clear, that, by the law of England and the law of Scotland, 
and, as far as we are aware, by the general law of Europe, 
when a surety has paid off the debt of his principal, not only 
all the collateral securities are transferred to the surety, but 
by what is called subrogation, the right is also transferred 
to him to stand in the place of the original creditor, and to 
use against the principal debtor every remedy which the 
principal creditor himself could have used. It seems to us, 
therefore, that the law of this country may be reasonably 
taken to be that which has been considered equitable in 
other countries, namely, that the surety is not debarred 
from proceeding against the original debtor upon the in- 
strument itself which created the debt by reason of the 
debt having been paid by himself." (Heera, Lall Samunt 
v. Syud Oozeer AH, XXI Suth. W. R., 347.) 



342 LAW OF MORTGAGE. 

LECTURE The English law on the subject is now contained in the 
x - Mercantile Law Amendment Act, 1856 (19 & 20 Viet., 
Mercantile c - 97), which provides that " every person who being 
Law Act. surety for the debt or duty of another, or being liable 
with another for any debt or duty, shall pay such 
debt or perform such duty, shall be entitled to have 
assigned to him, or to a trustee for him, every judgment, 
specialty, or other security which shall be held by the 
creditor in respect of such debt or duty, whether such 
judgment, specialty, or other security shall or shall not be 
deemed at law to have been satisfied by the payment of 
the debt or performance of the duty; and such person 
shall be entitled to stand in the place of the creditor, and 
to use all the remedies, and, if need be, and upon a proper 
indemnity to use the name of the creditor, in any action or 
other proceeding at law or equity, in order to obtain from 
the principal debtor, or any co-security, co-contractor, or 
co-debtor, as the case may be, indemnification for the 
advances made and loss sustained by the person, who shall 
have so paid such debt' or performed such duty ; and such 
payment or performance so made by such surety shall not 
be pleadable in bar of any such action or other proceeding 
by him." 

Rights of The surety being entitled to use against the principal 
surety. debtor every remedy which the creditor himself could have 
used, it follows that, if the principal creditor improperly 
deals with the securities or relinquishes them, the surety 
will be discharged, at least (a) to the extent of the value 
of the security (Contract Act, Sec. 141, Narayan v. Gonesh, 
VII Bom. H. C. Rep., 118.) But there is an important dis- 
tinction between securities existing at the time that the con- 
tract of suretyship is entered into, and those which are taken 
subsequently. A surety is entitled to the benefit of the former 
class of securities absolutely ; but, as regards the latter, his 
right to avail himself of them arises only when he actively 
puts himself in motion (Sees. 141, 142 of the Contract Act.) 
These provisions of the Indian Act seem to have been 
modelled on the English case of Neiuton v. Chorlton (10 
Hare, 646) a case, however, of more than doubtful authority 
(see Forbes v. Jackson, XIX Ch. D., 615 ; Campbell v. Roih- 
ivell, XL VII L. J. Q. B., 124; XXXVIII L. T., 33.) The 

(a) I say at least, because the provisions of the Contract Act are very 
far from being distinct on the point. Compare Section' 139, illustration 
(b), with Section 141 of the Act. 



RIGHTS OF CO-DEBTORS. 343 

surety, however, will be discharged only if the creditor is LECTURE 
guilty of misconduct or wilful neglect, as he is not bound * 
to make the most of his securities, although no doubt on 
general principles he must conduct himself with good faith 
towards the surety. 

You will observe that the English Statute, following in English 
this respect the law of other countries, allows to the surety " the 
not only the benefit of any security possessed by the cre- 
ditor, but also the benefit of any judgment which may be 
held by the creditor. The same right is extended to one 
of several debtors who may have been obliged to pay the 
whole of the debt due to the creditor. The co-debtor has 
the same equity as the surety, and ought in justice to have 
the same facilities for reimbursement. It is true that there 
are some expressions in the judgment of the Court in Degum- 
Imree Dabee v. Eshan Chunder Sen (IX Suth. W. R, 230), 
which would at first sight seem to show that a co-debtor 
cannot have the benefit of any securities held by the cre- 
ditor ; but the point really decided in the case was, that a 
co-debtor purchasing a judgment against himself and the 
other debtors, had no right to issue execution on the judg- 
ment for the purpose of recovering the whole amount from 
the other debtors. It is, however, unfortunate that the 
Court should have rested their judgment in great measure 
upon the English case of Dowbiggin v. Bourne (2 Young 
and Collyer, 462), which followed Copis v. Middleton 
(Turner and Russell, 231 ), in which a somewhat refined 
distinction was taken between securities that were merged 
by the judgment, and those that were available to the 
surety notwithstanding the judgment. The rule, however, 
laid down in those cases was considered to be unsatis- 
factory ; and, as we have already seen, the English Legis- 
lature has since passed an Act for the purpose of giving 
increased facilities to sureties and co-debtors for reim- 
bursement. 

I have already said that, as the law stands at present, one Case of 
of several joint-debtors cannot have the benefit of any Joint-debt- 
judgment held by the creditor. The procedure of our 
Courts in matters of execution is ill adapted to the deter- 
mination of the various questions which must necessarily 
arise in such cases ; but, as I have already pointed out, it 
does not, by any means, follow that the debtor will not be 
permitted to avail himself of any securities held by the 
creditor, and which the creditor might have enforced 



344 LAW OF MORTGAGE. 

LECTURE against his debtors. I may here remind you that where a 
x - person who is only interested in a portion of the mortgaged 
premises is compelled to pay the whole debt, he will be 
entitled not only to contribution, but also, as we have seen, 
to a lien on the share of the other mortgagors. (Punchum 
Singh v. All Ahmad, I. L. R., IV All., 58 ; Bhagirath v. 
Nanbut Singh, I. L. R., II All., 115 ; Eira Chand v. Abdul, 
I. L. R., I All., 455 ; Gobind Pershad v. Divarka Nath, XXV 
Suth. W. R., 259.) And it would seem that he will not be 
deprived of this right, although the mortgagee by bring- 
ing his action against only one of the parties might have 
put it out of his power to bring a second suit on his mort- 
gage. (Jagut Narayan v. Qutub Husain, I. L. R., II All., 
807.) 

other ap- There are several other cases in which the -law allows a 
plication of person who discharges an incumbrance to stand in the place 
11 e of the mortgagee. A purchaser of the debtor's equity of re- 
demption, who pays off incumbrances on the purchased pro- 
perty in order to acquire a safe title, may, under certain cir- 
cumstances, use such incumbrances as a shield against the 
claims of a subsequent incumbrancer who may not have been 
paid off. (Syud Ajid Hossein v. Hafiz Amed Reza, XVII 
Sutb. W. R., 480 ; and cases cited therein. Compare Raghu- 
nathPrasadv. Jurawan Rai, L L. R., VIII All., 105.) (fr) 
The question, however, is not entirely free from difficulty, 
and I reserve a fuller discussion of it for the last lecture. 
Many other instances of subrogation will also be found in 
the books. Thus, in the case of Syud Mohamed Shamsal 
Hasla v. Sheivak Ram, which was a suit by a reversioner 
to avoid a conveyance by a Hindu widow, it appearing 
that there was a valid mortgage upon the property for 
a certain sum which had been redeemed by money paid 
into Court by the defendant, the Court refused to make 
a decree for the plaintiff, except on the condition that the 

(&) lu Dilowar Salioy v. Bolaltee Ram, I. L. R., XI Calc., p. 258, where a 
purchaser of a mortgaged property with whose money a prior mortgage- 
had been paid off claimed to be entitled to the benefit of the first secur- 
ity, the Court was of opinion that, in the absence of anything to show 
the relative dates of the conveyance and the discharge of the mortgage 
debt, or that the money was paid by the purchaser himself and not by 
the vendor out of the purchase -money, the purchaser was not entitled 
by subrogation to the benefit of the first mortgage. This, however, 
would seem to be somewhat unduly tightening the meshes of techni- 
cality (see the observations of their Lordships of the Privy Council in 
Gocool Dass v. Pooran Mull, I. L. E., X Calc., 1035 Cf. 1014). See 
also Lecture XII, post. 



CONTUIBUTION. 345 

plaintiff should pay to the defendant the amount of LECTURE 
the mortgage which had been redeemed by him. (XIV Suth. 
W. R., 315 ; S. C., on appeal, XXII Suth. W. R., 409 ; 
Nilopandurang v. Ramaputtoji, I. L. R., IX Bom., 35 ; 
Kuvarji v. Moti Haridas, I. L. R., Ill Bom., 234 ; Baikesar 
v. Dullabh, VIII Bom. H. C. Rep., 31.) An analogous rule 
is followed when a conveyance is set aside, the Court fre- 
quently directing that the conveyance should stand as a 
security for the amount actually advanced to the plaintiff, 
or applied to his benefit. 

I now come to the subject of contribution. Thin Contri- 
involves the determination of the proportions in which bution< 
two or more owners of an estate, subject to a common 
charge, ought to contribute to its redemption, or what 
is the same question under another aspect, the extent 
of the right which one of such persons, who has been 
compelled to discharge the common debt, has to be reim- 
bursed by the others. This is only a branch of the 
general law of contribution, and rests on the plainest 
principles of justice and equity. Any other rule would 
leave it open to the creditor to select his own victim, 
and from caprice or favouritism what ought to be a 
" common burden" might be turned into " a gross personal 
oppression." We have already seen that a mortgage-debt 
is one and indivisible, and if several distinct parcels of 
land are hypothecated to the creditor, and subsequently 
pass to different purchasers, the creditor may proceed 
against any one of those parcels ; and the only way to 
prevent a sale or foreclosure would be to tender to him the 
whole of the mortgage debt. It is but reasonable that, in 
such a case, the person who is compelled to discharge a 
common burden, should be permitted to seek indemnification 
from the other purchasers, and no fairer rule can be sug- 
gested than that each of the purchasers should contribute 
according to the value of the property purchased by him. 
(Bhoynib Chunder Module v. Nudear Chand Pal, XII 
Suth. W. R., 291 ; Kaliprosonno v. Kamini, I. L. R., IV 
Calc., 475 ; Newmarch v. Storr, 9 Ch. D., 12) (c). It would 

(c) The same rule holds good, where the properties are subject to 
two or more incumbrances, thus where three properties were twice 
mortgaged, and the second mortgagee afterwards at an execution sale 
purchased the Interest of the mortgagor in two of the properties, each 
property was held liable to contribute rateably in proportion to its value 
first to the debt due on the first mortgage, and next to the debt due on 
the second mortgage. (Ahmed Beg v. Row NuMtar') Court minute book 



34G LAW OF MORTGAGE. 

LECTURE be manifestly unjust to allow a mere accident to cast upon 
Xt a particular portion of the land, and, therefore, upon the 
owner of that portion, a burden which was originally im- 
posed, and which ought in fairness, notwithstanding the 
proceedings of the creditor, to be laid equally on the whole, 
and, therefore, on all the purchasers ; and, as I have already 
said, no proportion can be suggested which is so equitable 
as that of the respective values at the date of the severance. 
English It would seem, although the point has never been 
point" the directly raised that, as no personal liability is incurred 
by the purchaser except where he is under a covenant 
to pay, the plaintiff will be only entitled to a charge 
on the portion purchased by the person from whom he 
seeks to be reimbursed. You will find the law similarly 
laid down by Story in his Equity Jurisprudence : " Cases 
may be easily stated where apportionment of a common 
charge, or, more properly speaking, where contribution 
towards a common charge seems indispensable for the 
purposes of justice, and accordingly has been declared 
by the common law in the nature of an apportionment 
towards the discharge of a common burden. Thus, if a 
man owning several acres of land is bound in a judg- 
ment or statute, or recognizance, operating as a lien on 
the land, and afterwards he alienes one acre to A, 
another to B, and another to C, &c. ; there, if one 
alienee is compelled, in order to save his land, to pay the 
judgment, statute, or recognizance, he will be entitled to 
contribution from the other alienees. The same principle 
will apply in the like case, where land descends to parcen- 
ers who make partition, and then one is compelled to 
pay the whole charge ; contribution will lie against 
the other parceners. The same doctrine will apply to 
cofeoffees of the land, or of different parts of the land." 
( 477.) And again in 484 the learned author says : 
" Let us suppose a case where different parcels of land are 
included in the same mortgage and these different parcels 
are afterwards sold to different purchasers, each holding in 
fee and severalty the parcel sold to himself. In such 
case, each purchaser is bound to contribute to the dis- 
charge of the common burden or charge in proportion 

December 20th, 1880, and on further directions December 8th, cited 
in Belchambers of the Civil Courts, p. 327. As to the right to an appor- 
tionment at the instance of a puisne mortgagee, sec Gunga v. Iliurixh, 
VI Calc. L. Rep., 336. 



CONTRIBUTION. 347 

to the value which his parcel bears to the whole in- LECTURE 
eluded in the mortgage." The principle is illustrated in the VI - 
case of Jeetram Dutt v. Durga Doss Chatterjee (XXII Suth. j w ^ v . 
W. R., 430). It appears that a creditor, who had a charge Dur ffa 
in the nature of a simple mortgage on two properties belong- Da "' 
ing to two different persons, levied the whole of the debt 
from one of the debtors. The person who was obliged 
to repay the whole of the debt brought a suit for contri- 
bution against his co-debtors, and in execution of the 
decree obtained by him, seized the property which had 
belonged to his co-debtor, and which formed a portion 
of the land on which the debt due to the principal credi- 
tor was secured. The creditor, who had in the meantime 
purchased the property, asked that the attachment might 
be withdrawn, and on the dismissal of the application depo- 
sited in Court under protest, the money due to the judg- 
ment-creditor, which was subsequently paid away to 
him. He then brought a suit for the money which he 
had been obliged to pay under protest, but the Court was 
of opinion that he was not entitled to recover back the 
money, apparently because the judgment-creditor had a 
lien on the land which formed a portion of the property 
on which the debt was originally secured ; and that he 
was entitled, "in respect of the security given for the 
original debt, to stand in the same position as the cre- 
ditor whose claim on th;it security had been satisfied." 
(Bhagirath v. Naiibat, I. L. R., II All., 115; Pancham Singh 
v. All Ahmad, I. L. R., IV AIL, 58 ; Asansal v. Vamana, 
I. L. R, II Mad., 223.) 

The general rule on the subject is, as I have stated, that General 
if two estates subject to one mortgage come to be owned e - " the 
by different persons, they must rateably bear the burden 
of the mortgage. But the rule is subject to the proviso 
that there is nothing to show a contrary intention. 
Thus, if part of an incumbered estate is sold with a cove- 
nant against incumbrances, the burden as between the 
mortgagor and the purchaser will be thrown entirely upon 
the residue in favour of the purchaser, and a similar equity 
will arise in favour of a person to whom part of the estate 
has been given in exchange. (Consult in re Athill, 16 
Ch. D., 211, and cases cited therein.) In the absence, 
however, of any such covenant or any intention to exoner- 
ate any portion of the property from the debt, a right 
of contribution will arise in favour of the person who 



348 LAW OF MORTGAGE. 

LECTURE has been obliged to satisfy the mortgage-debt. It is 
x - impossible to lay down any general rule on the subject, 
as the question must depend upon the language of 
each document. In a recent case decided by the Cal- 
cutta High Court (Mathura Nath Chattopadhya v. Krisna 
Kumar Ghose, I. L. R., IV Calc., 369), it appears that the 
plaintiff and the defendant respectively purchased at differ- 
ent dates portions of a property on which there was a mort- 
gage. In the deed of sale to the plaintiff, which was posterior 
to that of the defendant, there was an undertaking that 
the plaintiff would discharge all the liabilities, of the mort- 
gagor, including the mortgage on the property. The mort- 
gagee having obtained a decree against the property, the 
plaintiff paid off the entire debt, and brought a suit for con- 
tribution against the defendant who contended that, having 
regard to the undertaking of the plaintiff, he was not entitled 
to claim contribution. I may here mention that it was found 
as a fact, that the defendant was not aware of the mort- 
gage, and that he had paid a large sum of money for the 
property which he would not have done if he thought 
that he was only buying the equity of redemption. But 
the Court, notwithstanding, gave judgment for the plain- 
tiff upon the ground that there was nothing in the defend- 
ant's deed of sale to show any intention of the parties 
to exonerate the defendant from any liability which the 
law would cast upon him. The case, however, I am bound 
to add, seems feo be of somewhat doubtful authority. 

The English law on the subject is thus formulated in a 
well-known treatise on the law of Vendors and Purchasers. 

" If two estates, X and Y, are subject to a common charge, 
and estate X be sold to A, A will, as against the vendor 
and his representatives, have a primd facie equity, in the 
absence of express agreement, and whether or no he had 
notice of the charge, to throw it primarily on estate Y, in 
exoneration of estate X (see section 56 of the Transfer of 
Property Act). 

If, then, estate Y be subsequently sold to B, with notice 
of the charge and of the prior sale of X to A, B purchases 
with notice of A*s equity, and the entire charge must 
rest primarily on Y. 

If B, at the time of his purchase, have notice of the 
charge as affecting Y, but be not led to suppose that estate 
X is also subject to it, or if he purchase without notice of 
the charge, and A purchased with notice of the charge as 



CONTRIBUTION. 3-49 

affecting Y; in either of these cases, it is conceived, B's LECTUBK 
equity is inferior to A's, and the entire charge must rest 
primarily upon Y. 

If B purchase with notice of the charge as affecting Y, 
and with notice of the sale to A, and be led to suppose that 
X is subject to the charge, or if both purchase without 
notice of the charge, B's equity would appear in either 
case to be equal in degree to A's, so that, either party, by 
taking a transfer of the charge and the securities (suppos- 
ing them to be such as to give the incumbrancer a claim at 
law against the two estates), would, it is conceived, be able 
to throw the charge exclusively upon the other" (d). (Darts' 
Vendors and Purchasers, Vol. II., pp. 1035, 1036). 

Questions of considerable difficulty occasionally arise 
in cases in which some particular property is said to be 
the primary security for the mortgage-debt in which 
case the debt will be thrown entirely on such property 
instead of being distributed rateably. But the intention 
that some particular property should be the primary 
security should be clearly shown. Thus where several 
properties are mortgaged at the same time by different 
deeds, the mere fact that one of the mortgages is call- 
ed a collateral security will not throw the mortgage-debt 
primarily on the other properties mortgaged to the 
creditor. (Early v. Early, 16 Ch. D., 214 ; In re Athill, 
16 Ch. D., 211). So, again, where a debtor mortgages 
certain land and then mortgages other land for the 
same debt and further advances the whole amount will 
primd facie be treated as one debt, and must be borne 
rateably by the several properties. (Leonino v. Leonino, 
10 Ch. D., 460, and the cases there cited. See also 
Stringer v. Harper, 26 Beav., 33 ; Evans v. Wyatt, 31 B., 
217). But no doubt a person may make a mortgage of two 
estates in such a manner that though the incumbrancer 
may proceed against both or either of them yet if the 
equity of redemption devolves on two or more different 
persons the estate which was the primary security shall 
remain the primary security as between the persons 
claiming under the mortgagor. And it is scarcely neces- 
sary to state that the mortgagor may do this not only by 

(rf) Where the property is subject to a concealed incumbrance, it 
seems that a purchaser of part, having merely the equitable estate, 
may throw the entire charge upon a subsequent innocent purchaser of 
the equitable estate in the residue (Dart, citing Hartly v. C? Flaherty, 
L. &, G. temp. P., 208, 216. But see Sujjden, Ed. 13, p. GH.) 



350 LAW OF MORTGAGE. 

LECTUBE express words but by implication ; but the implication 
x - in such cases must be very clear. (Marquis of Bute v. 
Cunningham, 2 Russ., 275) (e). 

I now come to the doctrine of marshalling of secu- 
rities, which is intimately connected with the right of 
subrogation, which I have already considered. Whenever 
a person has a lien on two properties, and another a 
charge only on one of such properties, the Court will com- 
pel the mortgagee whose debt is secured on two properties, 
to take his satisfaction in the first instance out of the 
estate not in mortgage to the other, provided that his 
rights are not in any way prejudiced, or his remedies im- 
properly controlled. The very same result is accomplished 
in some systems, by allowing the mortgagee who has a 
mortgage only upon one estate to stand in the place of 
the other mortgagee, if the latter shall have taken his 
satisfaction out of that estate (/). 

Marshall- The doctrine of marshalling rests upon the principle, 
ing of Se- that a person having two funds to resort to should not be 
lties ' permitted from wantonness or caprice to disappoint another 
who has only one fund to go upon. If, therefore, the 
person with a claim upon two funds elects to proceed 
against that to which alone the right of the other is 
limited, the latter will be allowed to stand in the place of 
the former, and to satisfy his demand out of the other fund. 
The result of the English and American authorities on 
the subject is thus stated by Story in his Equity Juris- 
prudence ( 633, 642, 643) : 

Reason of " The general principle is that where one party has a 
the rule. jj en on or interest in two funds for a debt, and another 

(e) In England owing to the distinction between real and personal 
estates and the somewhat artificial rules on the subject of exoneration 
acted upon by the Court of Chancery, the Legislature was obliged to 
interfere by passing several successive statutes, the first of which is 
known by the name of Locke King's Act (17 and 18 Viet., c. 113, 30 and 
31 Viet., c. 69, 40 and 41 Viet., c. 34). As the law now stands in the 
absence of any expression of a contrary intention in writing, the mort- 
gage-debt must primarily be discharged out of the mortgaged property. 
I am not aware of any case in this country in which the question has 
been raised, but if it be ever raised, it will, I take it, be decided on 
the lines laid down by the English and partly adopted by the Indian 
Legislature. (See Section 154 of the Indian Succession Act which ap- 
plies to the Wills of Hindus, &c.. in the Lower Provinces of Bengal 
and in the Towns of Madras and Bombay). 

(/) As to the right of the Court to restrain a mortgagee from proceed- 
ing fraudulently or oppressively, in addition to the cases cited in Lec- 
ture IV, see Sygonatk v. Doolhun, XXIV Suth. W. R., 83 ; Krishen 
Pertab v. Nundcoomar, XXV Suth. W. 11., 388. 



MARSHALLING. 3-jl 

party has a lien or an interest in one only of the funds for LECTUBE 
another debt, the latter has a right in equity to compel x - 
the former to resort to the other fund in the first instance 
for satisfaction, if that course is necessary for the satisfac- 
tion of the claims of both parties, whenever it does not 
trench upon the rights or operate to the prejudice of the 
party entitled to the double fund. " 

" If A has a mortgage upon two different estates for the Suinmar 
same debt, and B has a mortgage upon only one of the of English 
estates for another debt, B has a right to throw A in the Ia * " the 
first instance for satisfaction upon the security which he, pc 
B, cannot touch, at least where it will not prejudice A's 
rights or improperly control his remedies." It is some- 
times said that unsecured creditors in this country have 
no right to compel a mortgagee to resort in the first 
instance to the mortgaged property so as to leave the 
other properties free or to allow the disappointed creditors 
to stand in the place of the mortgagee in the event of 
the mortgage being satisfied ; but as I have already pointed 
out, there does not appear to be any such general rule. 
(See Lecture IV.) The case sometimes cited in support 
of the proposition only lays down that the general creditors 
cannot compel the mortgagee of two or more estates to 
resort to any particular property comprised in his mort- 
gagee in preference to another. (Kristo v. Ram, I. L. R., 

VI Calc., 142. Of. Rajkishor v. Bhadu, I. L. R., 7 Calc., 78.) 

I need hardly point out that, ordinarily, a subsequent Rights of 
purchaser of one of the estates has just as strong a claim purchaser, 
as a mortgagee. (Rodhmal v. Ramharakh, I. L. R., VII All., 
711 ; Bishonauth Mookerjee v. Kisto Mohun Mookerjee, 

VII W. R., 483 ; Mussamut Nowa Koowor v. Sheck Abdul 
Ruheem, W. R., 1864, p. 374. But see Lola Dilwar v. 
Bolakee Ram, I. L. R., XI Calc., 258 ((7).) There is, however, 

(<?) This judgment would seem altogether to negative the doctrine 
of marshalling, although it has been recognised by our Courts in several 
reported cases, and also at least partially by the Legislature, see Sees. 81 
and 82 of the Transfer of Property Act. It seems to me with great 
deference that the judgment of the learned Judges is based upon a mis- 
apprehension of the dictum of Lord St. Leonards in Averall v. Wade. 
The observation of the Lord Chancellor evidently refers to a case of 
foreclosure when no one offers to pay the mortgagee off, the mortgagee 
of two estates having a right to compel the debtor to redeem or to be 
foreclosed. Lord St. Leonards could scarcely have meant to say that 
the principle of marshalling was not at all enforceable against a mort- 
gagee of two or more estates. At any rate in India marshalling 
having been recognised at least in favour of a mortgagee, the only ques- 



352 LAW OF MORTGAGE. 

LECTURE this difference between the position of a purchaser and that 
X. of an incumbrancer. In the case of a purchaser, if the pur- 
chase was made with knowledge of the mortgage and sub- 
ject to it, there is no reason why, as between the pur- 
chaser and the mortgagor, the burden should be thrown 
in the first instance on the mortgagor ; although, as I have 
already endeavoured to explain, the person who is com- 
pelled to pay the whole would be entitled to bring an 
action for contribution. (Tadigolla v. Lakshmamma, I. L. 
R., V Mad., 385.) A mortgagee, however, stands upon a 
different footing. He has a right to enforce the payment of 
his debt, and whether the mortgage to him was or was not 
with notice of the prior incumbrance, the mortgagor can- 
not complain with reason of any facility which may be 
offered to the second mortgagee by compelling the prior 
mortgagee to resort, in the first instance, to the estate 
which is not the subject of mortgage to the puisne incum- 
brancer. The case, in fact, is analogous to the familiar 
case of a mortgagor redeeming the first mortgagee. Such 
redemption enures to the benefit of the puisne mortgagee, 
and the mortgagor will not be permitted to say to him 
" you shall satisfy yourself only out of the equity of re- 
demption on which alone the debt was secured." The 
point is a very important one, and must be carefully borne 
in mind. In some of the earlier English cases, you will 
find it laid down that marshalling could not be insisted 
upon by an incumbrancer with notice of the prior rnort- 

tion that can arise is whether or not there is any ground for refusing 
to enforce it in favour of a bondjide purchaser for value. 

In Averall v. Wade all thafc the Chancellor did, was to refuse to appor- 
tion a prior judgment between the settled and unsettled estates in favour 
of a subsequent judgment-creditor, and threw the whole of such prior judg- 
ment upon the unsettled estate on the ground that the judgment-creditor 
had not got any specific charge. In his Treatise on Vendors and Pur- 
chasers, Lord St. Leonards, in referring to the Irish cases of Hartly v. 
OS Flaherty, Beat. 61, and Averall v. Wade, says : " In a case in Ireland 
where Sir A. Hart and Lord Plunket differed in opinion, in the result 
they appear to have agreed, that where there is a concealed incumbrance, 
as a judgment, a purchaser of a portion of the estate cannot be com- 
pelled to contribute by a later purchaser of another portion. And the 
rule was considered to apply equally to the case of a mortgage of the 
whole estate. 

It has since been decided, that whether there is upon the first sale a 
mere concealment of the judgment, or, a fortiori, if there is a declar- 
ation or covenant that the estate is free from incumbrances, the first 
purchaser is entitled to be relieved against the seller and later judg- 
ment-creditors claiming under him, so that the estate unsold must bear 
the whole of the prior judgment-debt, as well as its own subsequent 
iucumbrauces." Vendors and Purchasers, p. 746. 



MARSHALLING. 353 

gage. (Lanoy v. Duke of Athol, 2 Atk., 446.) The rule, LECTURE 
however, was considered too narrow, and the distinction 
has since been abolished. (Gibson v. Seagrim, 20 Beav., 
614 ; Tidd v. Lister, 10 Hare, 157; Liverpool Marine Co. 
v. Wilson, 7 Ch. Div., 507. See, however, sec. 81 of the 
Transfer of Property Act.) 

The doctrine of marshalling has been adopted by our Marshall- 
own Courts as a rule founded in equity and good conscience, jng >n 
.although it may perhaps be doubted if the reservations by 
which the doctrine is qualified have been sufficiently attend- 
ed to in some of the reported cases on the subject. 

In the case of Mussamut Nowa Kowar v. Sheikh Abdul Anpiica- 
Rohim (Suth. W. R., 1864, p. 374), one of the estates in |( 8 . f e tlie 
mortgage having been sold under an execution levied by 
an ordinary creditor, the purchaser under the execution 
resisted the attempt of the mortgagee to enforce his secu- 
rity against the property which had been purchased by 
himself, without in the first instance proceeding against the 
properties which still belonged to the mortgagor. The 
defence was allowed, and the Court, in giving judgment, 
observed : " The sale (i.e., the execution-sale) does not 
release that estate from the mortgage, but it forces the 
plaintiff to take measures in the first place to recover the 
amount due to him from the remaining estates included in 
his mortgage-deed. If any balance remains after he has 
realized all which he can realize from these two remaining 
estates, he can then return to the third estate to recover 
the balance. No injustice is done to the plaintiff by requir- 
ing him to take satisfaction out of funds which are within 
his power for this purpose, and so placed by the deed ; 
while, on the other hand, very great injustice might be 
done to other parties by allowing plaintiff to proceed 
against the estate which has been already sold." 

It is probable, although the fact does not appear from 
the report, that the purchaser bought without notice of 
the mortgage, and paid, not for the equity of redemption, 
but for an absolute interest in the property. Even in 
that case, however, it is extremely doubtful, as I have 
already explained, if the purchaser under the execution 
could set up the defence of a bond jide purchase for value 
and without notice of the incumbrance. (Bapuji Baled v. 
Satyabhama Eai, I. L. R., VI Bom., 490 ; Kinderly v. 
Jervis, 22 Beav., 1 ; Beavan v. Earl of Oxford, 6 De G. M. & 
G., 507 ; Bhikaji v. Yoshvantraw, I. L. R., VIII Bom., 489 ; 

R. B. G., M. 23 



354 LAW OF MORTGAGE. 

LECTURE Ramlochun v. Ramnamin, I Cal. L. Rep., 296 ; Dolphin 

x - v. Aylward, L. R., 4 H. L., 486.) 

Cases on There are other cases also in the books iu which secu- 
the point, rities have been marshalled, which you may usefull}' 
consult. (Tulsi Ram v. Munu Lall, I Suth. W. R., 353 ; 
consider Bissonath Mookerjee v. Kisto Mohun Mookerjec, 
VII Suth. W. R., 483 ; Chetoosee Churria v. Bany Madhub 
Dass, XII Suth. W. R., 114,) 

The principle of marshalling, however, as I said, cannot 
be exercised to the prejudice of a third party. Thus, the 
Court will not marshal in favour of a second against a third 
mortgagee. Nor it seems will there be any marshalling 
to the prejudice even of a person claiming under a 
voluntary conveyance. If, however, a person by his mort- 
gage takes, expressly subject to and after payment of the 
prior mortgagees, marshalling may be enforced as against 
him. (See the Cases collected in II White and Tudor's 
Leading Cases, pp. 111-118.) 



LECTURE XI. 



Pledge of moveables Paucity of authority Contract Act Definition of 
pledge Validity of hypothecation of moveables Danger of fraud Distinc- 
tion between a pledge and a mortgage of chattels Power of sale Pawnee's 
lien extends to interest and necessary expenses Extraordinary expenses 
Right of pawnee to tack subsequent advances Rule of English law Right 
of pawnee to make use of pledge Degree of diligence imposed on pawnee 
Differences between Indian law and English and Roman law on the point 
Pawnor's right to accessions Right of redemption Passes to the legal 
representative Possessory heirs General and special Unpaid seller's 
lien May be varied Uight of resale Differences between Indian and 
English law Lien of artificers Banker's and attorney's lien for general 
balance of account. 

I NOW propose to treat of pledges of moveable property. pi e dge of 
This class of securities is, by no means, unimportant, moveables. 
although, in a country like India, the wealth of which 
mainly consists in agriculture, they are not so common as 
in commercial countries. It is for this reason that there 
are so few cases on the subject in the books. Pledges, 
however, occupy a distinct chapter in the Contract Act ; 
and, although it cannot be said that the Legislature has 
dealt with every point in connection with the subject, it 
has certainly removed a good deal of that obscurity which 
must necessarily gather round such a topic in the absence 
of well-defined rules. 

A pledge is defined in the Act to be the "bailment of Definition 
goods for the payment of a debt, or performance of a pro- of P led s e - 
mise "(a}. But, although the bailment itself is called a 
pledge, the bailor and bailee are severally called pawnor and 
pawnee, a change of phraseology for which it is somewhat 
difficult to account. The property pledged may be any- 
tiling of a personal nature, although not goods in the ordi- 

() Of. sec. 58, Transfer of Property Act, where the promise must be 
such as to give rise to a pecuniary liability. It is said in Benjamin on 
Sales, p. 14, that there may be a valid pledge, although the goods remain 
in, or are returned to, the actual possession of the pawnor as trustee for 
the pawnee, and for this proposition, Martin v. Reid (C. B., N. S., 730) ; 
Reeves v. Capper (5 Bing. N. C., 136), and Langton v. Waring (18 C. B.. 
N. S., 315), are cited as authorities. (Cf. Mnjerstein v. fiarbei: L. R., 2 
C, P., 52.) 



356 



LAW OF MORTGAGE. 



LECTURE 
XI. 



The Con- 
tract Act. 



nary sense. Thus, money debts, for instance, choses in 
action, shares in a company and even patent rights may be 
given in pledge. (Kemp v. Westbrook, 1 Ves., S. 278 ; 
Roberta v. Wyatt, 2 Taunt, 268) (6). 

You will have observed from the definition of a pledge, 
that it must be accompanied by a delivery of possession, 
which, it is hardly necessary to point out, may be either 
actual or constructive ; but a mere license to take possession 
will not be enough. (Ex-parte Parsons, 16, Q. B. D., 532.) 
The Act is silent on the subject of the hypothecation of 
moveables. I told you in the introductory lecture that, 
in most modern systems of law, the hypothecation of 
moveables is, either not permitted at all, or is fenced in by 
a multitude of rules which are absolutely necessary for 
the prevention of fraud (c). We do not purchase land with- 
out examining the title-deeds, but moveables are daily 
transferred from one person to another, simply on the faith 
of the vendor's possession ; and one of the most difficult 
problems which modern legislation has to solve is the 
reconciliation of the interests of commerce with the pre- 
vention of fraudulent transfers of moveables by persons 
in possession of them. It is, therefore, to be regretted, 
that the Contract Act is silent on the subject of hypothe- 
cation of moveables. We must not, however, infer from 

(&) The Contract Act contains no definition of goods in the chapter 
on pledges. It may be here stated that there may be a contract for a 
pledge of goods not in existence, (Story on Bailments, p. 270), and even 
at common law there may be a valid mortgage of property of a fluctuat- 
ing nature, as, for instance, the stock of a tradesman. (Spence Vol. II, 
776.) 

(c) In the French law there can be no hypothecation of moveable 
property (Code Civil, sections 2114, 2120). In this respect it agrees with 
the laws of most of the Continental States of Europe and of the United 
States of America and also of Scotland. (Burge, Vol. 3, p. 573. Story 
on Bailments, pp. 265, 273.) The same rule obtained under the Coutume 
de Paris and the Coutumes de Normandy and still prevails in Jersey 
and Guernsey. {Haylcy v. Bartlett, 14 Moore, P. C., 251.) The gage 
of the French law like the pledge of the English law, requires that the 
security should be delivered to and remain in the custody of the credi- 
tor or of a third person appointed by the parties for the purpose. (Code 
Civil, sections 20742076.) An exception, however, is recognized, in 
favour of maritime hypothecation. According to Sir William Jones, the 
distinction between pledging and hypothecation was originally Attic, 
although according to the same authority hardly any part of the 
Athenian laws on this subject can be gleaned from the ancient orators 
except what relates to bottomry in some speeches of Demosthenes. 
(Collected Works of Sir William Jones, Vol. VI, p. 654.) I may mention 
that on the same page the learned author refers to the peculiar doctrine 
of the Mahomedan law in regard to the loss of pledges as affecting the 
rights of the pledgee. 



MORTGAGE OF GOODS. 357 

the silence of the Legislature that such transactions are LECTURE 
invalid in this country, or that they may not even be en- XI - 
forced against bond fide purchasers without notice. In the 
case of Deans v. Richardson (III All. H. C. Rep., 54), the 
Allahabad High Court affirmed the validity of a mortgage 
of moveable property, although unaccompanied by delivery 
of possession. In giving judgment, the Court observed : 
"Now, without going at length into the numerous English Cases on 
authorities cited by the learned counsels in the course of the P int - 
their arguments, we may lay it down as the result of the 
latest rulings, that, by the common law of England, where 
goods are mortgaged and left in the possession of the origi- 
nal owner, the circumstance that they are so left is not to 
be held as a fraud 'per se' rendering the mortgage liable 
to be defeated as between the mortgagee and third parties, 
such as bond fide purchasers or judgment-creditors ; but 
when possession is left with the mortgagor, this is a cir- 
cumstance which warrants the Court in leaving it to the 
jury to determine whether or not the mortgage was frau- 
dulent and colourable, or otherwise. We are not aware 
that any difference. prevails between the law on this point, 
which has heretofore been accepted in this country, and the 
English common law. When recently the proposed Code 
of Contract Law was discussed in this country, the provi- 
sion which the Indian Law Commissioners proposed for 
the security of bond fide purchasers of chattels from per- 
sons in possession was not only denounced as at variance 
with the received practice of the Courts, but as undesir- 
able in this country. We do not feel at liberty to hold 
that the rule which has heretofore been accepted is so 
inequitable that we are at liberty to disregard it in our 
judgment. The circumstances of each case should be close- 
ly scanned ; and, where it is shown that the original deal- 
ing is bond fide, it should be supported, notwithstanding 
there has been no delivery. In the present case no fraud 
other than alleged legal fraud and laches is imputed to the 
Bank. It is not denied that the advance was made and 
the security bargained for ; it is only urged that the Bank 
should have taken possession at least when failure occur- 
red in payment of the loan. The Bank was not, in our 
judgment, bound to take possession immediately after 
default was made. The machines were the means whereby 
the debtor earned moneys ; and it may, therefore, have 
been imagined that, in course of time, the debtor would 



358 LAW OF MORTGAGE. 

LECTURE be in a position to discharge his debts if indulgence were 
XI - shown him. The Court, after considering the arguments 
urged, finds that the property in suit passed to the auc- 
tion-purchaser, subject to the lien created in favour of the 
Bank ; and a decree will issue accordingly in favour of the 
Bank." 

This doctrine was adhered to iu the subsequent case of 
Shy am Surder v. Cheytaloll, and the mortgagee was allowed 
to enforce his security against a purchaser without notice. 
(Ill All. H. C. Rep., 71.) We must not, however, forget 
that there is considerable danger of fraud in such cases ; 
and in England the legislature has found it necessary to 
make stringent provisions for the protection of creditors 
generally in a series of Acts known as the Bills of Sale Acts. 
Distinction It may here be necessary to notice the distinction 
mortgage between a mortgage and a pledge of chattels. A mort- 
and pledge, gage, although it is subject to a condition, passes the 
whole title to the creditor, but a pledge passes only what 
English lawyers call a special property. " A mortgage is a 
pledge and more ; for it is an absolute pledge to become an 
absolute interest, if not redeemed at a certain time. A 
pledge is a deposit of personal effects, not to be taken 
back but on payment of a certain sum, by express stipula- 
tion or the course of trade to be a lien upon them." 
(Jones v. Smith, 2 Ves. Jun., 378. See also ex-parte Official 
Receiver in re Morrit, 18 Q. B. D., 222 ; Halliday v. Holgate, 
L. R., 3 Ex., 302 ; Donald v. Suckling, L. R., 1 Q. B., 594.) 
The mortgagor of chattels may, therefore, be allowed to 
retain possession till default, but such a proceeding is open 
to the same objections as a hypothecation. As a neces- 
sary consequence of the distinction between a pledge and 
a mortgage of chattels, a pledgee is only entitled to an 
order for sale, while a mortgagee is only entitled, in the 
absence of any agreement to the contrary, to an order for 
foreclosure. (Carter v. Wake, 4 Ch. I)., 605 ; ex-parte Offi- 
cial Receiver in re Morrit, 18 Q. B. D., 222.) It is scarcely 
necessary to state that the pledger by virtue of his general 
property may sell all his right in the pledge, and similarly 
the pledgee may assign his interest in the pawn either 
absolutely or conditionally by way of pledge to another 
person (d.) It would not, however, be always safe for him to 

(rf) The interest of a pledgee in redeemable pledges may be taken in 
execution. In re Rollason, 31 Ch. D., 495 ; Cf. Hallida